…..a personal if informed rant!
Our regular guest blogger Ben Reeve-Lewis gets on his soapbox.
The Conservative / Lib Deb coalition housing benefit plans
So the new coalition government is gradually putting a plan together and have turned their eyes on housing benefit reforms. They have made bold and popular statements that appeal to many of us, me too, but few seem to be looking at the consequences of what they are saying. If you have worked in housing a long time then they jump out at you like a jack in the box.
I just want to examine one proposal, which is the plan to cut people’s housing benefit by 10% if they have been out of work for 12 months and look at where this will lead us.
Cutting housing benefit by 10% of the applicant has been out of work for 12 months
An innocuous enough proposal and one that will get many nods of agreement. The papers have always been full of articles on benefit cheats, scroungers, mis-use of tax payers money etc. Just the other day I saw a piece on TV of a man on disability benefits claiming that he couldn’t walk more than a few yards un-aided who was filmed by benefit fraud officers energetically playing football for his local team.
I recently had to deal with a family with 8 children and a ninth due in November whose benefit payments were over £600 a week and that was without housing benefit on top of that. The council have a legal duty to re-house them but don’t have a property big enough so will have to spend thousands finding them a home and keeping them in it.
This prompted much talk in the office about benefit reforms and personal responsibility. Government statements aimed at tackling similar situations will always have emotional resonance for a huge majority of the population. We tend to respond in a knee jerk way…. even me, but what will it really mean if they go ahead with this 10% cut plan, marked for 2013?
A couple of years back the labour government decided to introduce a housing benefit scheme called ‘Local Housing Allowance’.
Basically this means that tenants of private landlords who are claiming housing benefit should no longer have the right to sign payments directly over to the landlord accept in specific circumstances. The reasoning behind this was to stop treating HB claimants like irresponsible children and to empower them to take charge of their finances.
Everyone I know who works in some way in the private rented sector thought this was the most ludicrous idea the government ever had, for 3 reasons:-
- Although some tenants would deal with the matter responsibly, what of the HB claimants with drink, drug or gambling problems or who were just terrible at budgeting ,who suddenly find themselves with an extra 5, 6 or 700 pounds in their bank accounts? How much of it would end up being used as rent?
- Rent arrears would rise and with it evictions and homelessness claims.
- Landlords would be less likely to rent to benefit claimants because of concerns over receiving rent.
The same issues crop up with this proposed 10% cut in HB.
Don’t get me wrong, I am more in favour of personal empowerment than most, but I also know you don’t achieve that by just giving a person their rent payments.
Reluctance to rent
For many years now the windows of most letting agents have had stickers saying ‘No DSS’, (even though this is now defunct) really meaning, no housing benefit claimants. Landlords have similarly been cautious. LHA put many landlords I speak to in a very reluctant mood. Procurement officers that I know working for local authorities tell me how much work they have to do to reassure landlords about tenants they are trying to place with them.
Some councils deposit guarantee schemes have closed down completely when deposits have been withheld because of rent arrears caused by LHA and the deposit scheme budget quickly dwindled.
Once word gets around that there will be a definite cut in HB how many landlords will go back on the standard old ‘No DSS’ approach? As I have written elsewhere councils are under a duty to provide housing for people who pass the full homelessness assessment route but don’t have enough council housing to fulfil the legal obligation and look to private landlords to fill the gap. The 10% cut will have a big effect here.
The government states that cutting 10% off HB for people who have been on job seekers allowance for 12 months will encourage people to find work.
I am going to sound a bit cynical here so apologies in advance. Just as introducing LHA is not enough on it’s own to empower people, neither is cutting people’s benefits.
Every single day I meet so many benefit claimants who think that once they have filled in the forms their involvement ends there and rent is then the council’s responsibility.
A high proportion of people I deal with don’t even know how much rent they pay or when it falls due because again, to their minds, the council deals with these things.
When a fixed term contract comes to an end most council’s housing benefit teams stop payments until a new contract is issued. I get involved when the landlord complains of rent arrears and the tenant doesn’t even know that HB payments have stopped or why.
My great fear in this is that far from being empowered so many tenants will just accept less housing benefit as an occupational hazard and shrug it off thinking it is nothing to do with them.
Also, and in defence of many, looking for work is one thing, having jobs available to look for is another. The government is already talking about the amount of jobless and for many, depending on the area, working can be a difficult prospect.
- If housing benefit doesn’t cover enough of the rent then this gives a landlord grounds to evict their tenant for rent arrears.
- If a tenant then becomes homeless as a result then they can approach the council’s homelessness unit who have a duty in many cases to investigate the claim.
- If they find that a person lost their home through rent arrears they can deem that the person is what is termed ‘Intentionally Homeless’ and refuse to re-house them.
- More homelessness claims on already overstretched services having to find 25% cuts to fit the government’s budget.
- More loss of homes and with it weakened communities. How can you sustain a community when people keep moving?
- More families forced to make do, sharing with friends and family or living in overcrowded conditions.
- Damaged ability to rent other properties privately because of bad references.
- Less properties available for rent to benefit claimants.
- Loss of ability to borrow money because of damaged credit ratings.
- Smaller market for private landlords to invest in.
- Increased support costs for people who need social services involvement
And all this because of a populist idea of saving 10% on HB budgets. But how much will this cost a council overall? It costs tens of thousands of pounds to push a single family through the homelessness system, far more than would be saved by a 10% cut elsewhere. The difference is that cuts in HB would come out of the financial services budgets while increase in homelessness and support costs come out of housing department budgets, but all in all it is still the council’s pot.
A new government, new ideas but the same old lack of joined up thinking in favour of a crowd pleasing policy and demonization of people on benefits.
About Ben Reeve-Lewis: Ben was the Tenancy Relations Officer for Lewisham Council for 11 years, prosecuting landlords for harassment and illegal eviction. Now he is a freelance housing law training consultant with a more balanced approach, delivering housing law courses for the Chartered Institute Of Housing, Shelter etc. His aim now is to help the housing world work as a interdependent system that benefits all