Housing Benefit cuts: What more do we know?
The changes that the Budget outlined to Housing Benefit have proved to be some of the most controvertial. Since they were announced extensive analysis has been undertaken of the potential impacts these changes could have, including the DWP’s own equality impact assessment, and below we have outlined some of the key findings that have emerged.
A central concern is that several of the policy priorities the new Government professes its committment to – ending homelessness, reducing ‘ghettos’ of poverty and increasing social mobility – are extremely likely to be undermined by these new measures. Some of the key findings are below:
- The Chartered Institute of Housing (CIH) state that capping Local Housing Allowance rates is likely to severely affect the availability of private rented properties to Housing Benefit recipients in many high-rent areas, forcing people to leave their communities or putting further pressure on social housing and homelessness services.
- The National Housing Federation has estimated that more than 750,000 people are at risk of losing their homes in London and the South East because of next year’s proposed changes, which would lead to the highest levels of homelessness for over 30 years. The Building and Social Housing Federation (BSHF) has warned that the negative impacts of the measures could undo any public expenditure savings made, as a result of additional expenditure on homelessness provision, health, education and other service areas.
- Citizens Advice’s analysis shows that the reduction of the value of LHA to the 30th percentile of local rents means that average loss in housing benefit for a two-bedroom property, for a lone parent or couple with one child (or two young children sharing a bedroom) – whether unemployed or on a low income – will be £9.60/week, or about £500/year. In London, losses will be even more severe. While the Government has been keen to highlight that this change will leave 30 per cent of properties available for households (at least until the real terms value of the benefit starts to fall as it is indexed to CPI), BSHF highlight that even at present only a minority of private sector landlords are willing to rent to people claiming Housing Benefit.
- Cutting Housing Benefit for people who have been unemployed for 12 months will lead to severe financial hardship for groups including lone parents and disabled people who are moved onto JSA and are then unable to find a job. St Mungos have highlighted that this measure will penalised the unemployed people who are in the greatest need of support. These reforms could also discourage landlords from letting properties to people on Housing Benefit.
- Linking LHA to CPI will lead to a significant deterioration in its value – Meg Hillier MP has referenced Shelter’s research which shows that between 1999-2007 CPI increased by 15 per cent, while average rents rose by 44 per cent. The research shows that had LHA been set to increase with CPI in 1999 it would now be 20 per cent below the level needed to rent an average property.
- Plans to reduce increase deductions for non-dependants are likely to lead to increased rent arrears – Citizens Advice highlight that non-payment by the non-dependant is common, leading to family tension and pressure on non-dependants to move out of family homes, as well as reduced housing benefit.
- At the same time as increasing deductions for non-dependents, the Government also plans to restrict housing benefit payments to working-aged social tenants based on the size of accommodation that they are deemed to need. BSHF have identified that this is effectively ending security of tenure by the back door, and have highlighted that lone parents or parents whose children leave home are likely to be particularly badly affected.
- The DWP’s equality impact statement (which only covers the proposals which will be introduced in 2011) shows that families with children will be disproportionately impacted by the changes. It also acknowledges that homelessness and overcrowding may increased as a result of the Government’s proposals.
These are only some of the negative impacts that these poorly thought through Housing Benefit reforms are likely to lead to – and they may not be the only changes: questions asked in the House of Commons suggest that the Government may already be in discussion with some local authorities regarding proposals to change the Homelessness Duty (which requires local authorities to make suitable accommodation available for applicants who are eligible, homeless through no fault of their own, and have a priority need) and the local connection criterion (which determines whether a local authority has a responsibility to help homeless households).
Inside Housing is running a campaign against the cuts. Lets hope that it is successful.