I don’t think I can really let the revelation in the Observer yesterday of the Pickles letter regarding the likley outcome of the Housing Benefit reforms go without at least some comment.
Ministry of Magic speak
Fiction is often a frightening reflection of reality and I think there is a lot of similarity between the governments comments about the likely effect of these reforms on the homelessness figures, and the Ministry of Magic’s pronouncements on the likely return of He Who Must Not Be Named in Harry Potter 5.
It now appears that, like the Minister for Magic, the government had been told about the true situation all along.
Common sense?
To most people the combination of lower housing benefit rates + a shortage of housing + landlords wanting to earn money rather than run their business as a housing charity (not an unreasonable approach) = greater homelessness.
Housing charities have been saying it, landlords organisation have been saying it, the press have been saying it, we have mentioned it from time to time on this very blog, now it appears that even officials in the relevant government department were saying it, but STILL government told us that the reforms would not result in any big problems, just a long overdue saving of money currently being wasted on greedy families living in houses they otherwise could not afford.
I should perhaps say here that I too am uneasy about non working families getting a bigger income on benefit than they would if they were working. But it is part of this topsy turvey world we live in. I don’t think the answer is cutting off the funds so they are made homeless. Not if there are children involved.
What the letter said
So what did the Pickes (office of) letter say? I have just had a look at it, and the salient points appear to be as follows:
- the estimated £270 million savings does not take into account the extra costs to Local Authorities of homelessness and temporary accommodation. So actually it looks like the reforms are going to cost us all more money.
- The lower benefit available to pay rents is going to mean that it is not going to be economic for builders to build ‘affordable’ housing, and that therefore probably about 1/2 of the planned housing will not be built. Even worse – the half that won’t be built will be the half with all the family homes in it, not the half with all the small flats. (What happened by the way, to all those surplus flats built before the smash? Are they still empty?)
- Then thirdly, the benefit cap will result in some 20,000 extra homelessness acceptances in addition to the 20,000 which will result from other changes to housing benefit. Homelessness acceptances that is. What about the ones that aren’t accepted? Presumably they will be homeless too but won’t appear in the figures so they won’t count.
There is also a reference to ‘difficult handling locally’. Does this perchance mean outraged residents wanting to smash up the benefits office when they find out they aren’t getting enough money?
The letter thinks that things may be improved by removing child benefit from the cap, which would, says the writer, allow a family with four children to live anywhere but London. So what are the London families with four children going to do then? Although presumably as nobody has taken any notice of the letter, all families are going to find it difficult to find accommodation, in all areas of the country.
It will be interesting to see what reactions follow the disclosure of this letter, and whether the HB proposals are modified. Now, as it were, Voldemort has been known to have been seen by ministers. Common sense says that the proposals will HAVE to be modified now, but is common sense something which exists in the rarified upper echelons of the coalition?
What do you think?
Note – since writing the above I have seen an excellent report from Nearly Legal which looks at the ‘Minister for Magic like’ pronouncements being made by Housing Ministers long after this letter is known to have been written.
I watched this fiasco unfold over the weekend with an open mouth. When I had caught enough flies I shut it and started tweeting.
20,000 homeless applicants,as you say Tessa, just those accepted, not approaching the homeless person’s unit, and of those applicants lets not forget that we arent talking about 1 person for the most part, but commonly 3 or 4 with the kids.
If supply is driven by demand then even those who have to leave London for cheaper areas will find rents in the provinces being driven up.
At the moment there seems to be a bun fest among some landlords looking to make a kiling instead of taking the long view on sustaining good profits. We’ve seen this time and time again.
And why should people have to move away from the area they grew up in, the place where all their family, friends, networks and history are? Its like the highland clearances of 18th centruy Scotland
And I know I am stating the obvious but if the whole point of HB cuts was to save vast swathes of money, what is the point if the homelessness bill goes up and just takes it’s place?
I think most landlords currently taking LHA tenants would need to calculate the risk in evicting them, especially when you take into consideration void periods and refurbishment costs.
I have worked in Haringey and most of the properties rented out via LHA or the private leasing schemes are pretty poor and I cannot see much demand for them apart from LHA. Lets be honest, the introduction of LHA actually drove prices up and the standards of LHA properties down. I am all for the Government capping LHA rents and introducing Landlord accreditation to all landlord who take public money to fund their property empires!!
Thank you for commenting Darrel. If the cap works and saves money then, good. Certainly there is always a risk in evicting tenants who are at least paying something, and private sector tenants will want better quality properties if the landlord wants to move upmarket.
What do other readers think?
I dont think private tenants have the clout to influence landlords one way or the other at the moment. It is a sellers market. Too many tenants priced out of buying are looking for properties. If an individual tenant demands better quality a landlord will just turn to the tenant who isnt making the demands.
Contrary to what the government says, tenant demand will not improve the lot of tenants or the condition of the propertie, quite the opposite.
Shelter today published findings that the vast majority of tenants feel powerless in the landlord/tenant relationship
One thing that really needs to be tweaked with Housing Benefit is the colossal brainfart that was having it by default paid to tenants unless they’re “vulnerable” or they are 8+ weeks in arrears.
Who thought that was a good idea?
Landlords are loath to let to HB tenants because of that, as who is to say that the tenant won’t just snaffle the HB monies.
Exactly JS. So many landlords are moving away from HB tenants. Re-instating the old payment method would go a long way to solving the problem. Its a suicidal regulation hated by everyone