Millions of pounds released for housing benefit support

Readers' comments (9)

• _jane_ | 03/08/2011 1:26 am

  North London Housing Partnership?
  
  That'll be this lot, then: http://nlhp.org.uk/

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• SERTAOM YEK | 03/08/2011 11:02 am

  "Lord Freud, welfare minister, said: ‘It’s absolutely vital that we take urgent steps to manage housing benefit expenditure, which has been spiralling out of control for more than a decade."
  
  Name and shame those responsible for the local administration of HB on behalf of DWP. Then the HA's and RSL's and private slumlords who have bloated themselves at the trough. Then have a look at the authorities managing Supporting People schemes and contracts. Those in work as well as the vulnerable benefit dependent are at their mercy.

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• 

  Joe Halewood | 03/08/2011 11:27 am

  Sertaom Yek - The DWP state the added costs of HB in exempt and supported accommodation are between £70m and £130m per year (see page 73 of DWP Research Report no 714)
  
  Whereas; the SHBE official figures on HB and LHA payments show that private landlords are charging the public purse £3.232bn more in LHA than the equivalent HB for the same number of properties. That was at April 2011 the latest figures and this is still rising due to record rent levels and record increases in private sector housing.
  
  Its clear who has bloated themselves at the trough!

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• 

  McMadman | 03/08/2011 1:43 pm

  Remind me what proportion the £4m is of the total HB or even welfare budget spend ? Even the £190m over the review period is a tiny fraction.
  
  Sertaom - the problem is, many people assessing HB and other benefits are on below average wages, trying to make sense of byzantine rules, regs and guidance. It's not their fault the system is ludicrously complex to administer and thus open to error and fraud. It's the politicians you need to be railing against.

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• 

  Jono | 03/08/2011 10:18 pm

  _Jane_ - No I'm not sure what's happened to that website. I know a little Latin but I can't make sense of much of it!!
  
  Try http://www.northlondonemptyproperties.co.uk/index.asp - I think this is the real website.

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• 

  Jono | 03/08/2011 11:08 pm

  Joe, let's look at the facts.
  
  Based on 2009-10 rent figures (latest available from this source):
  
  North - Median social rent is 79% of median market rents
  Midlands - Median social rent is 70% of median market rents
  London - Median social rent is 35% of median market rents
  Rest of South - Median social rent is 78% of median market rents
  
  Median social rents as a % of median market rents is 73% excluding London. Including London it is 66% of market rents.
  
  Source: DCLG English Housing Survey, full household sample.
  
  My interpretation of these results:
  
  1. London dwellers on low income are much more heavily subsidised than the rest of the country. If all social rents were as subsidised as London (at 35% of the median market rent), then social tenants in the North would pay £28 a week in rent, in the Midlands £35 a week and the rest of the South £36 a week. Compare this to the actual median social rent average of £76 per week. Social rented housing in London is disproportionately cheap.
  2. The overall average social rent is 66% of market rents (medians), or 73% excluding London. If London social rents were 73% of median market rents, they would be £177 per week, rather than the actual £85 per week. The affordable rents product at 80% would not look significantly more expensive when this is considered - only in London where the social rents are disproportionately low, does it look like a significant increase.
  3. London properties will be subject to the £250-£400 per week caps. About 28,000 households will see more than £20 per week increase in costs - but the nation will save over £40m in HB.
  4. If the £4m results in low income households relocating to cheaper areas, the HB cost will reduce further.
  5. If the allocation of homes is prioritised for those in work, this HB cost will reduce further.

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• 

  Joe Halewood | 04/08/2011 9:51 am

  Jono, my figures above were in response to Sertaom’s point and remain fact. We do pay £3.2bn more each year to PSLs in LHA than we do for the same properties to council landlords in HB. It remains a staggering amount. I could also have mentioned that it is a 61% higher amount and that over the last two years 71% of new claimants have been private tenants – a staggering proportion and a hugely worrying trend in terms of public purse cost.
  
  However, these issues are longstanding ones and such facts have many interpretations as does your median cost ones but these are not my principal concern at the moment.
  
  The DWP paper on imposing LHA on supported housing rents is my real concern and it’s a hugely significant one as I envisage a 20% reduction in supply in the next few years in hostel and refuge provision directly because of it, if it remains in its current state.
  
  The DWP research paper that estimated exempt and supported accommodation (ESA) is between £70 and £130m more than LHA is based on the 1 bed rate. Yet LHA is paid dependent on the composition of the claimant. So while ESA has many single under 35s who would attract the shared room rate, it also has many family claimants such as refuges, who could attract 2, 3 or 4 bed LHA rate and many disabled persons with carers who could attract the 2 bed LHA rate. The estimate is therefore fundamentally skewed as it could well be that the overall cost figure is currently less than the LHA rate and so if LHA is imposed it could cost more in overall terms than now.
  
  DWP is also looking at LHA plus a (positive) percentage to reflect the higher cost of ESA and this could end up costing even more.
  
  Yet LHA does not reflect and cannot reflect ESA provision. The ‘added costs’ of temporary short-term provision such as hostel and refuge are much higher than say sheltered housing as they have to be fully furnished and have higher staffing presence (if only to be able to admit new residents on a 24/7 basis.) So a flat rate payment simply doesn’t work and threatens the survival of hostel and refuge more so than any other ESA provision.
  
  Additionally paying a flat-rate ‘service charge’ as DWP proposes cannot take account of the differences between a 5 bed refuge provision and a 50 be sheltered housing one. Yet that is the intention. I’m keeping this just on cost alone and not looking at the thousands of legal challenges a fixed flat rate service charge would entail, though they would be substantial. This also threatens hostel and refuge provision more than other ESA provision.
  
  The DWP wants to take rent monies from hostel, refuge and sheltered it currently pays and use this to give higher rent money to supported living services that it states have higher support and care needs. That threatens hostel and refuge provision who have higher legitimate rent costs than sheltered and supported living services (and the notion of taking legitimate housing costs away to pay for higher care and support costs is truly bizarre logic as well as being unlawful in my view.) It then proposes that this pot of money swept away from hostel and refuge provision is to be administered by local commissioners. These local commissioners will then be tasked with (a) using it on mandatory spend services such as care and reducing their own budget outlay, or (b) giving it to discretionary spend services such as hostel and refuge they don’t have mandatory duties to fund. That’s a no-brainer and a huge financial risk to hostel and refuge services.
  
  Its yet another example of this government not understanding what they are doing as they seek purported 'savings.' The DWP 'proposals' - and note the consultation is one the design of the DWP decision and not the decision itself - will massively reduce ESA provision because of their ignorance of how ESA provision is and needs to be funded.
  
  It has no impact assessment either and DWP has clarified it is seeking landlords opinions on that. Any government that makes decisions without knowing the impact that decision will have is negligent. This is not a party political issue or point it is an economic one. Reducing hostel and refuge supply will massively increase cost to the public purse and is simply wrong. It is not an emotive argument either, though undoubtedly it will see more homeless and rough sleepers and more women dying as a result of a lack of refuge provision (and its inaffordability in this governments failure to exempt such vulnerable people from the overall benefit cap.)
  
  It is in summary a pigs ear that will lay waste to hostel and refuge provision and have massive social and economic cost to the public purse.

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• SERTAOM YEK | 07/08/2011 5:18 pm

  McMadman.
  
  " It's the politicians you need to be railing against."
  
  I have tried very hard to do just that. City Councillors and Canterbury@Tory appear to have no 'real' interest or motivation.

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• james cunningham | 08/08/2011 4:08 pm

  New Labour have been awful for tenants over the
  past 13 years , as they have allowed rents to go
  up by over 200% , and the housing benefit /rent
  costs have gone up from£5bn to £16 bn per annum,
  with the tories now keeping these high rents but
  cutting benefits.

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