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Welfare reform a major challenge for Welsh housing
The government’s green paper on social housing needs to provide answers for Wales over the LHA cap and Universal Credit, says Stuart Ropke
It has been fascinating to watch the debate on social housing evolve in England from across the border in Wales. The tectonic plates are clearly in motion when Sajid Javid, the secretary of state for communities and local government, stands up at the National Housing Federation conference in Birmingham and says: “We need to return to the time, not so very long ago, when social housing was valued. It was treasured. Something we could all be proud of, whether we lived in it or not.”
His words have been backed up with action as the prime minister has announced an additional £2bn to be invested in affordable homes in England.
This will be welcome news to those who have campaigned for investment in social housing, although one must hope that the £2bn only represents an initial instalment. Happily, this investment in social housing in England means a further capital injection for Wales through the consequential. However, to be frank, while more capital to build social housing in Wales is always helpful, it is not the main challenge we face today.
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Of course, through the years when the UK government turned away from investment in social housing, Wales continued to invest in genuinely affordable homes. It is ironic that, just as England rediscovers the merits of social housing, the roll-out of Universal Credit and the application of Local Housing Allowance (LHA) threatens to put social homes out of reach and unaffordable for those who need them most.
How are we in a situation where Local Housing Allowance (LHA) rates in many areas are not only not at the 30th percentile where the policy intends them to be, but in many cases we believe are below the 10th percentile? How can it be right that Universal Credit claimants have to wait months for their money and the government’s response is to propose advance payments in the form of a loan? Why do we not yet have certainty and clarity about the future of funding arrangements for supported housing and related services?
“How are we in a situation where LHA rates in many areas are not only not at the 30th percentile where the policy intends them to be, but in many cases we believe are below the 10th percentile?”
And, most importantly, where does this leave us?
In 2013, 24.3% of LHA rates in Wales were below the 30th percentile, with an average shortfall of £1.58. Fast forward to 2017 and the figures are 65.2% and £4.40.
The situation is amplified locally. In 2013, according to our analysis of LHA rates, the largest shortfall was the Shared Accommodation Rate (SAR) in South Gwynedd at £3.79 below the 30th percentile. In 2017, the SAR in Carmarthenshire is the worst hit, with claimants needing to find £12.71 per week to bring the LHA rates back up to the 30th.
If this trend continues, and there is no sign it will not, it is likely that in 2019 there will be LHA rates in some areas of Wales which are insufficient to cover rent on any private rented properties in that area. An increasing proportion of claimants’ income earmarked for food and utilities will instead be spent on topping up housing benefit. This undoubtedly will be a situation mirrored across the whole of the United Kingdom.
“It is likely that in 2019 there will be LHA rates in some areas of Wales which are insufficient to cover rent on any private rented properties in that area.”
You cannot divorce the funding and building of social homes from policies which support many tenants to live in them.
That is why, in Wales, we’ll be paying more attention than usual to the policy proposals that will emerge in the green paper focusing on social housing promised by Sajid Javid in Birmingham.
There are fundamental questions that need answering, a housing crisis to address and many thousands of people that need affordable, good quality housing.
Stuart Ropke, chief executive, Community Housing Cymru
