Falling short

The consultation paper on housing benefit reform ticks many of the right boxes and hints at the right u-turns with one big exception: shortfalls.

Work incentives? Check. Letting claimants keep their full housing benefit payments for three months after moving into work and setting fixed awards for up to six months should indeed ‘remove some of the uncertainty that goes comes with going back to work’.

Expensive properties (aka getting the tabloids off our back)? Check. Excluding rents on the most expensive properties in an area from local housing allowance calculations seems like a good idea and should mean fewer stories about £2.8m homes in Notting Hill.

Defusing the row about the withdrawal of the £15 excess payment? Check. It may be a somewhat embarrassing u-turn but the issues are more complicated than they seemed at the time and reviewing the decision for a year also dumps it into the in-basket of the next work and pensions secretary. Why not just stop it for new claims though?

Direct payment to landlords? Possibly. Yvette Cooper told the Commons yesterday that ‘it is important that the choice should lie with the tenant, not simply with the landlord because that has been an important way of empowering tenants and giving them more choice’ and there is still a determination to avoid what Malcolm Wicks called being ‘careful that we do not re-reform housing benefit purely in the landlord’s interest’. 

However, the consultation paper says ‘we would also like to consider returning an element of choice to customers which would enable them to decide to have their benefit paid directly to the landlord’ and floats the idea of linking that to landlords improving the energy efficiency or quality of their properties. Quite how and whether that would work remains to be seen.

Shortfalls? No mention - understandable perhaps in a consultation focussing on ‘supporting people into work’ but surely a problem that needs to be addressed urgently. 

Only last month a survey by Shelter and the Money Advice Trust indicated that 60% of tenants receiving local housing allowance found that it did not cover their full rent. In areas like Notting Hill the problem may be expensive properties with expensive rents but in areas like Cambridge the problem is whole areas where tenants cannot afford the rent and are left with a shortfall.

The consultation paper does discuss the problems with broad rental market areas and floats the idea of setting rents in smaller, ‘more tailored’ areas. That might help but the proposal is made with more expensive rents in mind and it could even make the problem worse in some areas. 

The problem is that nobody knows for certain how big the problem is. As Liz Phelps of Citizens Advice points out: ‘It’s very difficult to assess the various options without any knowledge of what the levels of shorfall are and the government should publish these.’

The sooner, the better.