Universal Credit (EAC Report)

Baroness Valentine Excerpts

Wednesday 23rd March 2022 Grand Committee

[Baroness Valentine (CB)]

I am grateful for this opportunity to discuss this important topic. I will focus on one particular aspect of universal credit: housing benefit. I should first say that I work part-time for Business in the Community on levelling up left-behind towns, in places such as Bradford, Rochdale and Sheffield. Each of these towns has their own unique strengths and challenges. In passing I should say that I am delighted that Bradford has just been shortlisted for City of Culture, which would give the city a tremendous boost.

The place on which I want to concentrate is Blackpool, which, according to Zoopla, provides a gross annual yield to buy-to-let investors of 8.6%, the second best in the country. So far so good, but now let us look at the living conditions in those buy-to-let houses. Blackpool has about 4,000 private rented units in the centre of town, the legacy of bed and breakfasts that did not keep up with the more modern hotel accommodation that is now available. Many of these B&Bs have been converted to houses in multiple occupation and those HMOs are located in eight of the 10 most deprived wards in England. Life expectancy in this area is the worst in England.

Some 80% of these tenants rely on housing benefit or universal credit. While tenants in social housing can rely on the decent homes standard, there is currently no quality assurance for a private landlord receiving housing benefit. Therefore, if you are motivated only by money, or indeed absent and unaware of local conditions, the incentive is to squeeze in as many people as possible, leading to those profitable yields that I mentioned. Not only are these people crammed in, but the conditions are appalling. It is estimated that one in three of these buildings has a category 1 hazard. This type of hazard is defined as

“the most serious harm outcome … for example, death, permanent paralysis, permanent loss of consciousness, loss of a limb or serious fractures”.

I am delighted to say that two Secretaries of State had the chance to see these dreadful living conditions for themselves last week, during the Conservative Party’s spring conference. The Government have now announced a package of interventions. These include beefing up the council’s inspection and enforcement team and investing through Homes England to create more liveable neighbourhoods.

I am truly delighted that the national Government have focused on Blackpool as an exemplar of how to level up. But the issue remains that tens of millions in housing benefit goes to these HMO landlords and, without any requirement for decent standards, there are plenty in Blackpool who will do everything in their power to avoid the expense and hassle of upgrading their properties. It is imperative that, as soon as possible, the Government bring in legislation which means that substandard landlords are not eligible for housing benefit payments, mirroring the decent homes standards that were introduced in the social housing sector in 2000.

The levelling up paper aims to reduce the number of “non-decent homes” by 50%,

“with the biggest improvements in the lowest performing areas.”

I would like to suggest an addendum: “and no non-decent homes will be funded by public funds provided through housing benefit or universal credit.”