Housing Benefit and Supported Housing

Alan Brown Excerpts

Wednesday 27th January 2016 Commons Chamber

[Chris Stephens (Glasgow South West) (SNP)]

I rise to support the motion in the name of the shadow Front Bench.

The starting point on issues surrounding housing benefit was the decision made a couple of months ago in a Delegated Legislation Committee to freeze housing benefit for four years. Once again, a decision was made in a Delegated Legislation Committee that should have been made through debate in this House. I am glad that the Independent newspaper, among others, has started to highlight this mechanism that the Government are using to bring in their most damaging policies affecting the country. I represent a constituency where 40% of homes are in the social rented sector and 10% in the private rented sector, so any changes in housing benefit will have an impact.

What has been most startling about these proposed changes, and the key thing to note, is that the Government have not produced any statistics on the number of housing benefit claimants who receive the benefit to pay for supported accommodation. In other words, the UK Government are proposing to cap lower LHA—local housing allowance—with no knowledge of how that impacts on women’s refuges and sheltered and supported complexes for pensioners, among other types of accommodation. No statistics are available on the number of residents in supported housing who are in receipt of full or partial housing benefit. On 17 November 2015, the Government were asked for the latest figures on the number of supported housing schemes in England that participate in such a scheme. Baroness Williams of Trafford answered for the Government:

“We do not hold this information. More information on the scale, shape and cost of the supported accommodation sector should be available through the evidence review jointly commissioned by the Department for Communities and Local Government and the Department for Work and Pensions.”

If the Government do not know the impact of the change, why make it?

This Tory Government must halt their continued assault on housing benefit so as to ensure that those who need supported housing are not literally left out in the cold. Supported housing provides vital help to tens of thousands of people. It plays a crucial role in securing a safe home and supports people to live independently. Supported housing provides the support for older people to maintain independent lives. It provides emergency refuge and support for victims of domestic violence, helping them to stabilise their lives and to engage with other services that they require. Supported housing providers work with homeless people with complex and multiple needs and help them to make the transition from life on the street to a settled home, education, training and employment. In my constituency, I know the work of a charity called Soldiers Off The Street that supports military veterans who are homeless and struggle to meet the challenge of civilian life, having served in our armed forces.

Supported housing assists people with mental health needs to stabilise their lives, recover and live more independently. It supports people with learning disabilities in the longer term to maximise independent living and exercise more choice and control over their lives. The stark reality is that any change to housing benefit can undermine the ability of such tenants to pay their rent, thereby putting their home at risk and threatening their physical and mental wellbeing, as well as posing a threat to the financial stability of housing associations. Single people under 35 will lose out, as well as those who need supported housing. Analysis by the Institute for Fiscal Studies concluded that the savings arising out of this measure would be small in the short run, cutting housing benefit expenditure by £255 million in 2020-21.

The longer-term impact of the change is expected to be more significant. If applied to all social tenants now, housing benefit would be cut by £1.1 billion from a base of about £25 billion, with 800,000 households losing an average of £1,300 per year across the UK. An Inside Housing article from 21 January 2016 claims that 95% of supported housing providers would be forced to close their schemes. The Scottish Federation of Housing Associations has arrived at figures that point to the potential cash impact of the policy, as it stands, in Scotland, based on a small-scale piece of research that it conducted with its members in the weeks since the autumn statement.

The proposed changes could have a devastating effect on the future provision of refuge accommodation in Scotland, because that accommodation is in the ownership of either housing associations or local authorities. LHA rates do not take into account the additional cost to refuge providers of leasing accommodation from social landlords and the associated service charge costs. A range of additional costs are involved in providing and managing refuge accommodation for women and children fleeing domestic violence. These costs derive from the more intensive housing management due to the crisis nature of admission, the special vulnerability of the women and children concerned, and the variable lengths of stay and rapid turnover. Other requirements include the need for increased safety and security measures, and the provision of furniture, bedding and equipment. Many refuges also include additional facilities such as communal rooms for counselling and therapeutic playrooms for children.

An analysis by the Angus branch of Scottish Women’s Aid found that in all cases, refuge rent and service charge costs are significantly higher than the LHA rate. It provides the example of a rural area where introducing a cap linked to the LHA rate would result in an annual loss of £5,800 for a two-bedroom refuge flat. In other examples, the annual loss on a one-bedroom refuge flat in an urban area is £7,100 per year, while the loss on a three-bedroom refuge in a semi-urban area is £11,600 per year. In each case, the financial cost will be multiplied by the number of refuge spaces provided. Without the existing level of housing benefit to cover costs, refuges may be forced to close. It is estimated that 62% of housing association tenants rely on housing benefit to help them to pay their rent.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

My hon. Friend is making a powerful speech. His point about the protection of refuges is important. In addition to our opposition to the Government measures, is it not quite clear that in Scotland, where housing is devolving—leaving the Scottish Government to protect the general stock, end the right to buy and fund new build housing and new supported accommodation—we need the full devolution of housing benefit to square the circle and to allow us to protect the most vulnerable and our general housing?

[Chris Stephens]

I agree with my hon. Friend. The SNP has been pursuing the full devolution of housing benefit.

The proposed introduction of the under-35s shared accommodation rate in social rented housing means that younger people will struggle to meet their rents, and it places women under the age of 35 at much greater risk of further abuse. The Scottish Federation of Housing Associations has found, based on its own analysis of the figures, that a single person aged under 35 who is reliant on housing benefit would face a weekly shortfall of £6.22, which is £323.44 per year. That translates into a rental loss of £2.8 million per year for housing associations in Scotland. The SFHA comments that that is likely to be a conservative estimate, given that, in August 2015, there were already 67,462 housing benefit claimants in social housing tenancies with housing associations in Scotland under the age of 35.

If women under the age of 35 are unable to access refuge accommodation or move into their own tenancy because of a restriction on their entitlement to housing benefit, that will in effect prevent them from leaving an abusive partner. In 2014-15, the 26 to 30-year-old age group had the highest incident rate of domestic abuse recorded by the police in Scotland. Women in that age group clearly have a significant need for domestic abuse support services, including refuge accommodation.

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[Chris Stephens]

That factor would compound the original error. My hon. Friend is absolutely correct to raise that issue.

Discretionary housing payment to top up the gap between LHA rates and the actual costs of providing supported accommodation is simply not secure enough in these uncertain financial times. The autumn statement indicated that additional discretionary housing payment would be made available to local authorities to protect the most vulnerable. This type of discretionary funding for the social sector is far too insecure and uncertain a funding mechanism to allow providers to continue to provide specialised accommodation, such as refuge accommodation. It would mean local authorities deciding at an individual level whose support needs would or would not be met. That would create a postcode lottery, as well as distressing tenants, worrying about whether they would be successful.

The Angus branch of Scottish Women’s Aid claims that that would create additional barriers, not to mention risk, particularly for those women and children experiencing domestic abuse who are seeking refuge. In April 2013, Lord Freud responded to Scottish Women’s Aid with his commitment to protect refuge accommodation from any unintended consequences of the welfare reforms. In order to ensure that such vital supported accommodation is protected, the UK Government must commit to at least exempting refuge providers from further squeezes. The Department for Work and Pensions has stated that the extent to which supported accommodation, including refuges, will be included within the cap is still to be decided. The DHP fund is a cash-limited annual allocation and the future of the payment is not secure, particularly if the pot is stretched to meet growing numbers. The DHP fund should not be used to top up benefit; instead, the changes—leaving gaping holes in the support for those that need it most to keep a roof over their heads—should not go ahead.

The proposed capping will lock out those who need support from seeking it or being able to afford it. The gap between the LHA paid and the price of supported housing could mean that many at-risk individuals will not receive the support they need from a residential tenancy. The Scottish Federation of Housing Associations argues that uncertainty about the allocation of DHP could leave potential tenants reluctant to take up supported accommodation that better suits their needs. Furthermore, it argues that the uncertainty and distress about access to appropriate support could create a vicious cycle of tenants not accessing support and associations being left with empty properties.

[Alan Brown]

Is it not absolutely contrary of the Government to say that they will protect the most vulnerable by providing additional DHP? The only way in which they can actually protect vulnerable people is by completely exempting them from the proposals for such types of accommodation, rather than by providing additional DHP.

[Chris Stephens]

I agree with my hon. Friend. It was interesting that the Minister, in his response to the Labour spokesman, made no mention of the additional cost of the proposals to the health service and other social services across the board. In some respects, these are penny-pinching proposals, given the higher costs that will arise in future.

The proposed cuts come in the context of additional Tory planned restrictions on housing benefit for some of the most disadvantaged people in society. As part of summer Budget 2015, the Chancellor announced the removal of entitlement to the housing element of universal credit from young people aged 18 to 21, with some exceptions, from April 2017. The regressive rationale is to

“ensure young people in the benefits system face the same choices as young people who work and who may not be able to afford to leave home.”

The measure is forecast to save £40 million by 2020-21. Certain categories of young people will be exempt from the removal of housing benefit, including vulnerable young people, those who may not be able to return home to live with their parents, parents themselves, and those who have been in work for six months prior to making a claim. Organisations such as Shelter, Crisis and Centrepoint have welcomed the limitation of the impact to 18 to 21-year-olds, as opposed to the wider age group of 16 to 24-year-olds, but are actively lobbying against the removal of what they describe as an “essential safety net”, which can offer a lifeline to young people faced with homelessness.

Only with full power over social security can we fully protect individuals in Scotland from future housing benefit cuts. The Smith commission recommended that powers over discretionary housing payment be devolved to the Scottish Parliament. Clause 23 of the Scotland Bill allows for DHP to be paid in exceptional circumstances, where applicants would not normally be eligible. The Smith commission also recommended that the Scottish Parliament have the power to vary the housing costs element of universal credit. Clause 27 gives Scottish Ministers powers to vary the calculation of the housing costs element of universal credit, subject to consultation with the Secretary of State about the practicability of implementation. The Scottish Government are already protecting low-income families from the impact of the bedroom tax, with total funding of £90 million in mitigation of this draconian measure.

I am proud to represent a constituency rich in the history of helping and championing the less fortunate, and of standing up to those guilty of exploitation. In Glasgow South West only a few months ago, we commemorated the centenary of the Glasgow rent strikes, which were led by the great Mary Barbour. As is explained in early-day motion 684, which I commend to all hon. Members, that fight against unscrupulous landlords who increased rents on the home front took place during a time of sacrifice on the western front. It may have been a century ago, but we have come full circle, as exploitation of one of the most basic human needs—shelter and a place to raise a family—is once more a key issue in Parliament. That is why my right hon. and hon. Friends and I will vote for the motion.

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[Graham Evans (Weaver Vale) (Con)]

I would like to put it on record that I, too, welcome the announcement on the 1%.

We spend more on family benefits in Britain than they do in Germany, France or Sweden. There is no doubt that social housing is invaluable for hundreds of thousands of people in this country who need help in getting accommodation, but it cannot be right to continue to subsidise people to live in houses that are bigger than they need while there are 375,000 families living in overcrowded conditions. Nor can it be right to subsidise people to live in houses that are out of reach or unaffordable for hard-working taxpayers.

Page 97 of Labour’s 2009 Budget summarised the problem:

“Indications…are that some claimants may be able to afford accommodation that is out of reach of working families on low incomes. Furthermore, costs of Housing Benefit have been rising above inflation despite static caseloads.”

In fact, between 1999 and 2010, the cost of housing benefit rose by 46% in real terms, reaching £21 billion. Housing benefit was truly out of control, with the maximum housing benefit award reaching over £100,000 a year. Even after the benefit cap, people can seek support for housing up to a rate of £20,000 a year. What would a working family paying tax have to be earning to afford rent of £20,000 a year? They would have to be earning £60,000, £70,000 or £80,000 a year.

Rents in the social sector increased by 20% over the three years from 2010-11 and were markedly higher on average than for like-for-like properties in the private sector. That is clearly unsustainable and helped to fuel the something-for-nothing culture that Labour presided over for 13 years. Some 1.4 million people spent most of the previous decade trapped on out-of-work benefits, while the number of households where no member had ever worked nearly doubled under Labour.

The announcements in the autumn statement followed on from reforms in the last Parliament to better align the rules between social and private landlords, ensuring fairness between those receiving housing benefit and the hard-working taxpayers who have to pay for it.

[Alan Brown]

Will the hon. Gentleman give way?