Friday, 06 March 2015

Campaign aims to find alternative method to reduce soaring benefit bill

Inside Housing campaigns against benefit cut plans

Inside Housing today launches a campaign to persuade the government to drop plans for housing benefit reform that could force thousands of people out of their homes.

What's the benefit logo

The What’s the Benefit? campaign has already attracted widespread, high-profile support from housing providers, homelessness charities and Ken Livingstone, former mayor of London. It is launched as campaign groups warned that measures to cut the £21 billion housing benefit bill announced in the emergency Budget (see box) will put thousands of people across the UK at risk of homelessness, and that many areas will become unaffordable for those on low incomes.

The campaign has three main aims: a parliamentary inquiry into the potential impact of the changes; for 300 people to sign a petition voicing concern about the government’s plans; and for readers to devise an alternative solution that will be presented to government ahead of October’s comprehensive spending review.

Kay Boycott, director of policy and campaigns at charity Shelter, said: ‘If these cuts go ahead in their proposed form, we may see large-scale social and personal upheaval as people are forced to leave their homes and communities to migrate to areas with the cheapest housing.’

Research by the Chartered Institute of Housing this week found that some areas will become unaffordable much faster than others. For instance, it found private tenants receiving local housing allowance would be unable to afford a room in west Cumbria in less than two years. The study also found there would be no affordable rooms for LHA claimants in shared properties in 20 areas in the next decade.

Sam Lister, policy and practice officer at the CIH, suggested the government should pay LHA based on a proportion of rents, rather than 100 per cent. This would discourage landlords from raising rents, as councils would not be obliged to cover the rise.

This week, Bob Neill, an under-secretary of state at the Communities and Local Government department, acknowledged that caps to LHA would prevent people living ‘in some very expensive boroughs where a person who was in work on a low wage would have no hope of being able to live.’

Visit our What’s the Benefit? page for more information or sign our petition to support the campaign

What’s the Benefit?

Our backers so far

‘There are a range of alternative measures that could reduce costs.’

David Salusbury, chair, The National Landlords’ Association

‘They are cutting the incomes of the people already at the bottom.’

Sam Lister, policy and practice officer, Chartered Institute of Housing

‘Millions now face an even bigger challenge in keeping a roof over their heads.’

Kay Boycott, director of policy, Shelter

‘We recognise the need for reform of the housing benefit system: however, we must find a way of ensuring that that does not harm those who can least afford it.’

Helen Williams, director,National Housing Federation

What the Budget planned for housing benefit

  • Limits of £250 for a one-bed property and £400 for four or more bedrooms.
  • Local housing allowance rates set using the bottom 30 per cent of rents rather than the median from October 2011. It will be linked to the consumer price index, rather than the retail price index. There are 1 million LHA claimants in the UK
  • Cutting housing benefit by 10 per cent for claimants on jobseekers allowance for more than a year.

Readers' comments (21)

  • My suggestion is that 'positive' solutions should be considered; the Housing Benefit cost to the country is absurd, surely more cost effective alternatives could be proposed to tenants?
    Supported transfers to other, less expensive areas?
    Research perhaps on how many tenants/ small groups would chose to move given the right proposal?
    Let us all try to be pro-active in finding a solution ; punishing tenants will only result in a lot more social problems.
    Lets have some real alternatives proposed, please.

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  • Chris Webb

    Kathleen - I live in a 'less expensive area' so in travel 4+hrs each day for work at a cost of 25% of my income. If I could afford to live near my work the I would save all that travelling time and cost, not to mention the CO2 of the trains I have to use.

    The only real alternative to the excessive (and excessive is exclusively relating to private rents) benefit payments is lower rents. If all rents were pegged at the level of social housing rents the total benefit bill would be more than halved, plus the lower and average paid would be able to live closer to where they work.

    The government proposals seek to address a symptom without correcting the cause. This blinkered view will only make a bad situation worse, but unfortunately people appear to be buying into the 'its the greedy tenant's fault' spin of the Daily RedTop Rant and BlameTheOtherGuy politics that is making this country look like the land that brains forgot.

    Forced removals have been used in the past - exclusively by extremist governments such as Stalin, Hitler, Pol Pot, to name a few - are we really volunteeing to line up behind such right-thinkers?

    Yes - limit benefit, but achieve it by limiting rent.

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  • Nicole M

    "The study also found there would be no affordable rooms for LHA claimants in shared properties in 20 areas in the next decade." Have they factored in that if there aren't enough prospective tenants who can afford to rent a room, rents might drop?

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  • If everybody lived on the streets, rents would drop because there are no tenants. But it's not a world I want to live in. The only long term solution to high rents is to build more homes and improve supply. Punishing tenants as a way of trying to regulate private rents is an appalling way to deal with the problem, but no surprise with Ian Duncan Smith and Grant Shapps in charge.
    The HB changes will affect all private and social tenants wherever they live, trying to blame it on those that live in high rent areas is just a cover. If poor people have to pay a higher share of their income on rent it might save a bit on HB but it will make the poor poorer, which even this government says it doesn't want to do.

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  • I understand why housing today would mount a capaign against the changes.
    But sorry they are long overdue. There are thousands of houses in this area of the south east which are available for rental nearly all are BELOW the rates set for weekly rental.
    In other parts of the country there are Hundreds of thousands of empty houses. In Northern Ireland 1 house in 5 is empty.
    persuading people to move to NI or the north of england would not only provide them with a nice home, but their spendings from their benefit income. would boost the local economies.
    We dont need anymore social housing built ,until we make use of the empty houses that already exist, in the UK

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  • Chris Webb

    Sorry Mr Bull
    I will not commute each day to work from Northern Ireland - I refuse to do so; I can not afford to; I do not want to and you should not be able to make me do so.
    The same argument applies to the other areas of depression you mention, for it is only the forgotton zones where cheapness occurs.

    If what you suggest is so good an idea, why don't you move to Northern Ireland and rent out your home here at a reasonable rent for a low or average paid worker to live in.

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  • Joe Halewood

    John Bull - "There are thousands of houses in this area of the south east which are available for rental nearly all are BELOW the rates set for weekly rental."

    You are entirely correct and not just in the South East. A parliamentary written answer said that 14,030 exceed the cap. Yet there are 4,718,940 HB claims nationally and this means that 99.99% are not affected by the cap.

    That demonstrates that the cap is very insignificant indeed.

    PSR - i agree that pegging PSL LHA levels to social housing levels is the only way to reduce the HB bill. Yet it would not halve the cost as you stated.

    The average socail rent level paid by HB is £77.02 and the average PSL in payment figure is £109.25 - Hence the saving would be £32.23 per week for the 1,428,080 PSL claims in payment - all at March 2010 figures the latest ones published.

    This results in a saving of £2.4bn from the current £20.6bn.

    This is more than the projected savings fromn the cap and cuts and work incentives combined in this proposal. It also is a year on year saving too and prevents the massive premiums paid to PSLs just because they have properties - so yes its obvious we need more social properties.

    From 1997 to 2008 official figures show all social properties fell by 800,000 (so this accounts for transfers) whereas the number of PSL properties nationally rose by 1.4 million

    Other HB stats show that in the last 10 years from 2000 the number of social housing HB claims rose by just 60,000 to 3.28 m yet the number of PSL claims increased by over 600,000 - ten times the social housing rate. In fact of the 690,000 increased HB claims in March 2010 from May 2000 over 620,000 were in the private sector

    As I have said constantly on here its not the odd few very high HB claims in westminster behind the HB bill spiralling, its the millions of £35 to £43 ovr and above the social housing HB levels that has done this.

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  • Mr Halewood.

    You're not supposed to write the above. Your facts are getting in the way of a good story.

    And what would Shelter and the CIH do if there wasn't something to get hot and bothered about?

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  • Joe Halewood

    Starting off with the head of the NLA signing the campaign ? Surely this leaves the option for "well, he would want that wouldnt he?"

    Im surprised at IH here in the level of ignorance at what the cap proposal will do to supported housing in the social sector. Many rents in single homeless, homeless families unit (HFU), DV refuges will exceed the cap wherever they are in the UK and not just London.

    Also in HFU and refuges the provision is typically a large room, yet when a lrage family need accommodating (floods in Hull and sheffield etc) or when a woman with a large afmily flees DV, they often have to have two rooms and HB pay two rents on the one claim.

    So in these cases the cap will be massively exceeded.

    These knee-jerk and frankly silly caps (silly as they affect 0.003% and so wont reduce HB bill) are ill thought through as im sure vulnerable DV cases and those affected by flooding and other emergencies were not the intended targets here.

    Im also surprised that the comments of IDS in the HB debate havent been picked up either. He said that underoccupation cases would see their housing benefit reduced to their number and not the property size. Again fine in superficial theory, but what happens to all those older persons whose sons and daughters have flown the coop?

    Without alternatives being available, such as secure 1 or 2 bed alternatives these persons have to stay put and make up the diiference themselves from pensions. Was that the intended target Mr Osborne?

    The same goes for lone parents. (oh dear NIMBY group!!) Transferrign them to JSA from IS is a targeted attack. Yet where are the jobs flexible enough that can afford to pay the childcare going to coe from?

    Again, we see deliberate victimisation here and in the case of lone parents its deliberaste unlike the older persons mentioned above.

    All in all, my key point here is that these proposala will affect many vulnerable people in social housing and not just the workshy westminster tenants the Daily Mail errant view loves to discuss. When the real victims of this are demonstrated then this campaign has a chance of succeeding - If it focuses on and prioritises the PSL tenants then it is bound to fail

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  • Chris Webb

    Joe - thanks for the data - as ever a voice for reason.

    I still claim that the saving can be considerably higher.

    For a start, releasing people from the benefit trap will help move people into employment, further reducing the demands on the benefit bill.

    Averages are great but mask peak concentrations such as the abominations used to house the homeless in the private sector at 'blank-cheque' rates of the kind the Daily Mail get so excited about. Removing these peaks is often the case in the official statisics, but even if not the proportional saving is greater than based on the average summation.

    OK not exceeding half, but exceeding 15-20% and still a multi-Billion saving at the same time as improving peoples quality of life - everyone's a winner!

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