Housing: Under-occupancy Charge

Monday 21st October 2013 Lords Chamber

Question

15:14

Asked by

[Baroness Hollis of Heigham]

To ask Her Majesty’s Government what advice they give to social landlords whose tenants have fallen into arrears as a result of the under-occupancy charge.

[Baroness Hollis of Heigham (Lab)]

My Lords, I declare an interest as chair of a housing association and I beg leave to ask the Question standing in my name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, social landlords had more than a year to design, develop and deliver strategies to mitigate the effects of under-occupancy and were advised to start building responsibly to avoid driving people into arrears. Prior to implementation, the Government, working collaboratively with the Chartered Institute of Housing, produced specific guidance for landlords, Making It Fit, and continue to fund its Making Best Use of Stock team, which assists landlords to find suitably sized accommodation for tenants. Fact sheets containing advice on home swaps, money management, payment options and how to look for and find work have also been issued. To be clear, 60% of those requiring social housing are single or couples without children, but over the last decades landlords have ignored this fact, resulting in larger homes being built, even though the greatest need is for smaller properties. Finally, £190 million has been provided this year to help vulnerable claimants.

[Baroness Hollis of Heigham]

My Lords, a recent sample shows that half of all affected tenants are in arrears and that three-bed houses are now hard to let. Do we move tenants to smaller accommodation? It cannot be done because there is none. Do we increase income with discretionary payments? For the 90% who are ineligible, it will not be done. Do we allow arrears to soar? As this could send us into the red, it should not be done. Or do we evict vulnerable families from their three-bed homes into temporary accommodation, back into an unwanted, hard-to-let, three-bed house? That can be done if we ignore the futility, misery and cost. Which of these options does the Minister favour?

[Lord Freud]

My Lords, it is simply premature to come to any conclusions as to the level of arrears. We will, of course, provide that information when we have the kind of reliable information that this House requires me, as a Minister, to deliver. There have been various surveys, but the samples are just too narrow. There are 1.4 million one-bedroom properties in the social rented sector and we are looking to have those managed more efficiently. I remind noble Lords that the scare stories about what would happen to our LHA reforms were very similar to the kind of stories that are being propagated now and we have not seen any poor reaction in terms of homelessness as a result of those reforms.

[Lord Best (CB)]

My Lords, in relation to the evidence that the Minister mentions, can he give us an update on the consultation with me and others that he promised when noble Lords rejected the so-called bedroom tax repeatedly and firmly? When will that research programme be the subject of consultation with us? When is it likely to be concluded? Will he accept the evidence if it shows that what he calls the “scare stories” turn out to be true and that a good deal of disruption and hardship are caused by this measure?

[Lord Freud]

My Lords, as the noble Lord knows, an elaborate programme of research is going on around this measure and will take place over a two-year period. Regular reports will be provided. I believe that the first interim reports are coming out in the spring. I will, of course, be pleased to talk to the noble Lord about the research and will give a great deal of attention to what we find. If there are concerns, we will match them. As noble Lords will know, we have made changes to the discretionary housing payments system this year to reflect some of the early concerns that have developed and we have found an extra £35 million for that.

[Lord Stoneham of Droxford (LD)]

My Lords, I declare an interest as chair of Housing 21, a housing association. There is evidence that local authorities are not fully using the Government’s transitional support funding for ending the subsidy for under-occupied housing. What action are the Government taking to ensure that those in need get the support that the Government have provided for them?

[Lord Freud]

My Lords, my noble friend is right. Our very early soundings are that some local authorities are not spending all their DHP. Clearly, we provide that funding in order that vulnerable people are protected through this transition period and we have been monitoring that very closely.

[The Lord Bishop of Ripon and Leeds]

My Lords, is the Minister aware of the evidence that people who are leaving accommodation to avoid the under-occupancy charge are being rehoused in private accommodation at greater cost? What steps are being taken to monitor this?

[Lord Freud]

My Lords, as I have just pointed out, we are undertaking an elaborate set of research programmes to understand this. If a family moves into private accommodation, which is more expensive, it does not necessarily mean that there is a net cost, because it frees up larger accommodation in the social rented sector to which a family can move from the expensive private sector.