What's the benefit?
A nationwide problem
Last week, homelessness charity Crisis released some figures detailing the spread of the housing benefit cuts across the country. These figures are part of Crisis’ analysis of the Work and Pensions department’s impact assessment on local housing allowance reforms, which came out last month, but they do show that the blow will be felt across the country.
Here are the ten local authority areas which will be hit hardest by the cuts:
• 18,870 households in Birmingham
• 15,610 in Leeds
• 12,620 in Liverpool
• 12,550 in Brighton
• 12,420 in Blackpool
• 11,180 in Cornwall
• 10,470 in Bradford
• 10,210 in Manchester
• 9,660 in City of Edinburgh
• 9,650 in Brent
Crisis has broken the figures for London down into boroughs, as with the rest of the country, which means the strength of the impact across the city as a whole is not clear, but what this analysis does demonstrate is that housing benefit is not just a concern for tenants in London.
Over the past few weeks, we’ve seen MPs in London come together to fight the reforms, while Boris Johnson is coming up with his own plans to present to ministers. We’ve had two London councils sign up to our campaign as well. But outside of London, feelings are running just as high.
New Labour MP for Houghton and Sunderland South Bridget Phillipson has spoken out against the effect of the reforms in her own constituency. In a piece for progressive political website Progress Online, she said: ‘The ConDem government’s aim is not to support families in this situation; its measures will simply push families and the most vulnerable in our society into poverty, debt and unemployment.’
In Scotland, Labour MSP for Glasgow Central Anas Sarwar has also called for the DWP to change its plans to cut housing benefit payments, and when I spoke to Grimsby MP Austin Mitchell about a tenant in his constituency a few weeks ago, he blasted the changes. The Liberal Democrat MP for Colchester, Bob Russell, started a campaign in his party against the reforms when he realised the impact that the reforms would have on major cities across the country. And Green Party MP Caroline Lucas is furious about what will happen to tenants in her Brighton constituency.
Even though it is great news that a movement against the reforms is galvanising in London, tenants in the rest of the country mustn’t be forgotten. There are families facing homelessness from seaside towns on the South coast to Sunderland, which is why the alternative offer that our What’s the Benefit? campaign will develop must look at the whole country.
If you’ve got any bright ideas for fairer reforms to housing benefit which will protect tenants across the country, email them to editorial@insidehousing.co.uk or post them in the comments below. And make sure that you sign our petition expressing concerns about the changes.
1,000 sign up to housing benefit campaign
There are lots of exciting developments this week in our What’s the Benefit? campaign.
First up, after just five weeks, we’ve passed 1,000 signatures on our online petition expressing concern about the impact of the reforms. Then there’s the announcement from the Social Security Advisory Committee, which advises the Work and Pensions secretary on changes to legislation, that it is launching an inquiry into the impact of the coalition government’s reforms to housing benefit . That’s in addition to the Work and Pensions select committee’s own inquiry into housing benefit, announced a few weeks ago.
Meanwhile, Lib Dem deputy leader Simon Hughes has revealed to Inside Housing that he is working with a cross-party group of MPs to come up with alternative reforms to housing benefit in London. He’s not the only politician concerned about the impact of the reforms in London: we also report this week that Boris Johnson has come up with his own plans to prevent a sharp rise in homelessness next April.
This is all very pleasing, but even though our campaign is gaining momentum, there is no change of plan from the government. So we’re now looking for suggestions for alternative reforms to the housing benefit bill. These ideas will form our alternative offer to government, which we plan to present to ministers ahead of October’s comprehensive spending review.
If you’ve got a brilliant idea for cutting the bill without putting quite so many people at risk of homelessness, send it to editorial@insidehousing.co.uk, or post it in the comments below.
People, not cash
Grahame Hindes, chief executive of Octavia Housing, outlines why he supports the What’s the Benefit? campaign for fairer reforms to the housing benefit bill.
A great deal of rubbish has been written since the budget about the proposed caps on housing benefit. Reading much of it you would think that it was a system designed by imbeciles and prayed upon by the feckless. Neither is true. While the costs of the current system are significant and short term savings can be made by limiting benefits the simple fact is that in doing so there is a whole group of decent people, with real local connections and close community ties who have been affected for some genuine reason of homelessness that are about to see their lives turned over.
Octavia Housing supports Kensington and Chelsea with a scheme that houses a minority of those accepted as homeless each year in private leased properties in the borough. But it is at a cost. There has been pressure on the system for a long time and the inner London authorities have all responded conscientiously to government pressure over the last few years to minimise costs. In fact the current housing benefit cost is in part a product of the last Government’s focus on reducing the numbers in Bed and Breakfast which has been unmatched by sufficient funding to build new homes. There is so little in the way of development opportunities in Central London that the use of the private sector has been the only realistic route. Even so many of those that are accepted as homeless are already housed outside the borough but the current legislation recognises that some families genuinely need to be housed locally. And accommodation in central London is expensive. Indeed it was just two years ago that Westminster Council were in the High Court seeking judicial review against Labour proposals to reduce the levels of Local Housing Allowance in Inner London. How times have changed.
The simple fact is that behind the tabloid headlines with their usual mix of a mite of truth and a large dollop of spin lies the reality of more complicated stories of people with lives in inner London, many of whom feel they are being driven out of areas such as Notting Hill by the incoming affluent classes.
And if the human stories are not sufficient cause for reflection and perhaps a slowing down of the rush for reform, then perhaps the economic consequences are also worth thinking about. Maybe, just maybe, it is the rich inner boroughs of London that at a time of austerity should be bearing their share of some of the costs of homelessness related social provision. To suggest that exporting a significant number of the poorest families from inner London where the cost may be higher but the systems are in place to manage them, and replace this approach by increasing the social deprivation in some of the poorer outskirts, is short sighted. There really is a benefit in mixed communities and central London can, and should, take its fair share of those in most housing need.
In the current cost cutting environment where gestures of savings seem to be what count then change may be inevitable. But let’s please show some compassion in making the change. This is about people as well as well as cash.
Bad news for BME tenants
BME tenants are particularly concerned about the impact of the reforms to housing benefit announced in the emergency budget. Sheron Carter, chief executive of Arhag Housing Association and Chair of London BME Directors, explains why the cuts are such bad news.
I no longer get hot under the collar each time one of the red-top newspapers pulls out some sensationalised story about some ‘feckless’ immigrant living large on the welfare state. It is a predictably easy target to get the juices flowing from the community at large, which faces ever-increasing house-prices and few affordable options.
In the 1990s I worked with BME homeless households and I found the majority living in worse-than-dire bed and breakfast accommodation or extremely overcrowded conditions, in homes that were poorly maintained and with the constant threat of end of term eviction.
Even with the move away from bed and breakfast to private sector leasing, the Kensington story isn’t at all typical of most people’s housing experience, immigrant or otherwise. In fact, it is more likely that black and minority ethnic communities may end up bearing the brunt of this new age of austerity.
It is commonly known that BME households have a greater need for larger accommodation. Local authorities have sold off most of the good stuff and the social housing sector has failed to build enough large homes to meet their needs. If living arrangements break down for any reason, may BME households have no choice but to consider private rented accommodation.
Capping the local housing allowance will force people to live in homes much smaller than their needs and result in state sponsored overcrowding with all the inherent health and social problems it generates.
The proposed housing benefit cuts provide even more bad news for BME communities. Amongst the out-of-work, BME people are twice as likely to be unemployed, which means the HB cuts will disproportionately affect these groups. It is naïve to put this down to fecklessness and to assume discrimination in employment no longer exists when there have been many studies which show that out of equally equally qualified candidates, a BME candidate is less likely to get the job. And that’s in the good times.
As a small ethical business I worry about the burden of carrying increasing debt and all the associated risks that brings. Most people on benefits will find it difficult to pay 10 per cent of their rent and I have found that courts are often reluctant to grant an eviction for people in difficult circumstances. This will leave associations to carry losses compounded by ever-reducing grant rates. Over the long-term this will not be sustainable no matter what the size of the association.
At Arhag we charge affordable rents for all tenures including temporary social housing which enables around 60 per cent of our tenants to be in work. Steadier house prices and affordable rents are better for the Treasury and for those trying to get on the property ladder. But there is money to be made and like those bankers’ bonuses I suspect no-one will want to give up what has been a nice little earner, regardless of the consequences.
Serious business
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 editorial@insidehousing.co.uk
Another way
Helen Williams, assistant director of the National Housing Federation, offers alternative suggestions for reforming the housing benefit bill.
Of the 4.7 million households claiming housing benefit, 76 per cent are retired or not expected to work due to illness, disability, or caring commitments. The remaining 24 per cent of claimants are of working age and expected to work, with 540,000 (50 per cent) in employment.
Supporting households with their housing avoids the massive social costs of squalid, overcrowded housing conditions. The Federation is convinced about the need for reform but very worried about the piecemeal range of reforms announced in the budget.
The system would be more effective in helping people back into work if housing benefit for working families was integrated within a tax credit system – this would remove the double impact of benefit tapers, reducing the worst marginal tax rates by over 20 per cent.
It would help make progress towards the Government’s long-term objective of creating a single working-age benefit and give people a wider choice of ways to meet their housing requirements.
The most effective way of reducing the burgeoning housing benefit bill is to invest in more affordable housing. This will secure savings for years to come. We are calling in our joint CSR submission for investment to provide 150,000 new affordable homes; had these been in place today, the annualised saving to the taxpayer could have been as much as £250 million in lower benefit bills.
We are calling for no further cuts to the amount available for spending on housing benefit until a public review of help with housing costs has been held and reform ideas tested.
Benefit reforms threaten mixed communities
Shelter chief executive Campbell Robb explains why he is backing the What’s the Benefit? campaign.
A month on from the emergency budget and extreme examples of housing benefit claims continue to dominate some elements of the media.
Yet those in the housing sector know only too well the reality of the impact these cuts will have, delivering a series of devastating blows to over a million households and striking at some of the most vulnerable in our society.
Over the last few weeks, Shelter has been one of many organisations working hard to demonstrate the scale of this impact, which will cause widespread social and personal upheaval and inevitably lead to greater costs to government further down the line.
When the proposed changes come into effect next year, we’re likely to see hundreds of thousands of households priced out of the areas where they live and work, forcing them to migrate to areas with the cheapest housing and pushing them into the bottom end of the private rented sector.
This could spell an end to the mixed communities Britain holds so dear, creating clusters of poverty and inequality on the outskirts of our towns. It certainly seems at odds with the coalition’s aim to move people off benefits and into work, if they cannot afford to live in those areas where work is available.
And what of the fates of those households who, faced with an even greater shortfall to make up their rent, are pushed into a spiral of debt, rising rent arrears, eviction and homelessness?
Undoubtedly we will see a rise in households presenting to their local authorities as homeless. Yet without any additional resources, councils will find it even harder to find affordable accommodation to place them in. This could mean pushing households into substandard housing or into overcrowded conditions.
It’s because of massive repercussions such as these that Inside Housing’s campaign, ‘What’s the Benefit?’, is so important.
There’s no doubt we must do more to demonstrate the long term cost-savings that could be delivered if these plans are reconsidered. But this is not enough. If we are to really convince the government, we must deliver concrete alternatives for housing benefit reform. This campaign is the first step.
Visit our What’s the Benefit? page for more information or sign our petition to support the campaign
The real face of housing benefit
There’s nothing quite like a good story about a housing benefit claimant living in a classy mansion at taxpayers’ expense. Which is why there is another clutch of such stories in the newspapers this week.
A number of papers chose to introduce their readers to Somalian Abdi and Sayruq Nur, who are living in a £8000-a-month house in Kensington with their seven children. Mr Nur is an unemployed former bus conductor who apparently decided to ‘upgrade’ his accommodation from a five-bedroom housing Brent, which cost £900 a week, to the townhouse, worth £2.1 million.
Stories like this always provoke neighbours, leader writers and readers to outrage, and are generally accompanied by photos of the claimant standing next to a gigantic television which they have supposedly funded by having their palatial accommodation paid for by the council.
But they’re not the true face of housing benefit, and shouldn’t be the reason why the government is moving to cap payments of local housing allowance. There are only 100 households claiming more than £1000 a week. That’s 100 out of 1 million LHA claimants. They might make 100 good stories, but the 999,900 other claimants are not living this luxury lifestyle. The majority are retired, have disabilities, are caring for a sick or disabled relative or families who work but earn too little to afford the rents in the areas where their jobs are. This is what The Independent had to say about this yesterday.
For these people, the caps on local housing allowance won’t be the end of living in a beautiful house in what The Mirror calls ‘posh Kensington’. It means not being able to afford living in the area where they have lived for decades, and having to move further away from jobs and the support network they rely on. When you look at the real face of housing benefit, the caps don’t seem so fair, do they?
What's the Benefit?
Last week, Inside Housing launched its ‘What’s the Benefit?’ campaign, which is asking for the government to reconsider reforms announced in the Budget which have the potential to damage hundreds of thousands of people.
We’re keen to hear from as many people as possible as we draw up our alternative offer to present to the government, as so over the next few weeks, we’ll be blogging here about the latest suggestions we’ve received from the sector, and new developments in the campaign.
If you’ve got a fantastic idea for how the soaring housing benefit bill could be kept in check without putting vulnerable tenants at risk of homelessness, email it to editorial@insidehousing.co.uk, and we’ll publish it on the blog, as well as collating it for the alternative offer of reform, which we’ll present to government in the autumn. If you’re a tenant who is worried about the reforms, or a landlord who is working out what a potential drop in housing benefit income will mean, please get in touch as well.
In the meantime, make sure that you sign our petition. Our goal is to reach 300 signatures, and we look set to hit that in the next few days as we’ve already gathered 234 supporters since Friday morning. You can also tweet about the campaign using the twitter hash tag #housingbenefit.
