Local Housing Allowance and Homelessness

Karen Buck Excerpts

Wednesday 24th July 2019 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

It is a pleasure to speak in this important debate under your chairmanship, Mr Bailey.

Central London, which includes my constituency, is the largest private rental market in the country. There is not one property for rent in the entire borough available to people on the local housing allowance rate. That includes not only some of the high-value property in Knightsbridge and Belgravia, which I would not expect to be accessible to those on local housing allowance, but some of the poorest wards in the country, such as Paddington. It includes hundreds—probably thousands—of properties that were council flats, have been sold under the right to buy and are now rented back to private tenants. Flat 3, say, which is socially rented, costs £150 a week, yet the property next door, which is privately rented, costs £500 a week.

What does it mean that not a single person in my constituency can afford to rent in the private rented sector? It results in cases, such as one I received the day before yesterday, of a mother who has been privately renting for many years and whose landlord has evicted her through a no-fault procedure—no doubt, they will get more money from another tenant. The local authority has put her in emergency accommodation on the other side of London, as is often the case. That rent for emergency accommodation, incidentally, will be around £500 a week.

That woman has a child with a statement of special educational needs in the borough. The borough has now said that the care plan cannot be moved to another borough, so her child cannot get the 20 hours of educational support that they need in the borough where she is currently in emergency accommodation. She has to go through the whole statementing process again, but she will not be able to do that before September. Her child is clearly in need. I would say the local authority is in breach of its statutory duties. The mother is totally desperate.

Another mother has two children who are blind. She has been in the private rented sector a long time. She wanted to stay in the same area, because her two blind children know their routes to their school and college. However, the shortfall in her benefit payments is now so severe that she has to use all her children’s disability allowance to meet the shortfall. That is probably legal, but it is clearly not what that benefit is intended for.

The situation is even worse for young people: under-25s can only get a single room and under-35s are also constrained. I am currently dealing with the challenge of trying to get a number of young people away from serious gang violence. One young man was sleeping with a machete under his pillow, because he was so terrified. For seven months, we have been trying to find somewhere he could afford to rent in London—in London, not just in the borough. There was not one property available in my constituency that was affordable, and only 0% to 15% of properties in the whole of London are affordable.

I am sure the Minister will refer to the targeted affordability fund, which has, thankfully, stood between us and total meltdown, but those complicated additional top-ups into schemes are not the answer. They are bureaucratic and complex, and they do not last. Similarly, discretionary housing payment is cited, as if it could plug the gap. Arithmetically, we know that it does not. DHPs are intrusive and complex. One woman was absolutely howling with grief to me because when she was filling out the form for a DHP, to fill the gap on her private rented property, she was told by the officer that in her budget breakdown she could not include taking her disabled child to the cinema—that expenditure was considered to be unacceptable if she was going to make a discretionary housing payment. I am sure we all have many examples of such untenable situations.

We know that for the foreseeable future we have to place in the private rented sector people whose incomes are too low to pay the rents and who will not be able to get into the social rented sector because there is such a catastrophic shortfall of socially rented properties, given that the right-to-buy scheme was not replaced and new building has not happened. It is all very well talking about meeting new targets, but we know that there has been a 90% fall in construction of social housing in the last nine years.

If people will be in the private rented sector, we have to act on quality and security. The Government are making some noises on that, which is good. We also have to act on affordability. I have been working with Sadiq Khan; I am pleased that the Mayor is bringing forward proposals to look at rent control. For the foreseeable future, we cannot just pour public money into supporting rents, which are rising again after a short levelling off. We cannot just expect public money to fill that gap, so we do need that. In the meantime, while we are trying to build and while we are waiting for the Government to act on control of rents, we urgently have to close that gap.

That means ending the freeze and restoring the housing allowance, so that at least the 30th percentile of renters in every single rental market, not just a few, can afford housing—and we need to keep it there. Without that, we will find more and more people, such as my constituents, swelling the ranks of the homeless—we already have 58,000 homeless families in London alone. They will be driven deeper and deeper into poverty, which will scar their lives forever and from which it will take them many years to recover.

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[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship this morning, Mr Bailey. I congratulate my hon. Friend the Member for Ealing, Southall (Mr Sharma) on securing this important and timely debate and on spelling out the reality for so many of our people. I also congratulate him on the 12th anniversary of his election to Parliament yesterday, which we were pleased to celebrate last evening.

As my hon. Friend said, we know that rough sleeping in London has hit a record high with an 18% rise on last year, but it is not limited to London. Since 2010, when the Conservative-Lib Dem coalition Government came to power, rough sleeping has more than doubled across England, and there is no one reason for that. There are ways that it could have been prevented, but successive Governments since 2010 seem to have been content to allow the numbers to escalate. Even when they have admitted that there is an issue, the Government have failed to act. Two Prime Ministers have seen the numbers grow on their watch. I wonder what the new one, due to be installed later today, will make of such a terrible legacy and what he will do to sort it out.

Our Governments and Prime Ministers have been too preoccupied with Brexit and internal warring, meaning that people across this country have been let down and forced on to the streets because they simply have no other option. It is not that the Government do not know what is happening to people who are being made homeless. Ministers are quite happy to turn up and spout at events like the recent one hosted by Crisis, but we know that for all their rhetoric and plans, rough sleeping has dropped by less than 2% in the past year. If it is to be eradicated, at that rate it will take 50 years to sort it out, so I am left with no other conclusion than to ask whether they simply do not care enough to act.

Let us look at what the Conservatives have done—the decimation of social housing up and down the country over recent years, a failure to build the social housing needed, and the erosion of the welfare state. Such failures have been major factors in generating a worrying rise in homelessness, and it is across the piece. The hon. Member for Strangford (Jim Shannon) is always in his place speaking up for the people of Northern Ireland. He made it very clear that the crisis here in the UK is reflected in Northern Ireland, too, and it is families that suffer as a result.

There is ultimately one root cause that must be tackled if we are serious about ending homelessness. We need to increase the availability and affordability of housing. Stable and secure homes will give people the best chance of moving on from homelessness, or preventing it altogether. Unfortunately, we are in a position where having housing for every person is seen as an ambitious goal when it should be the standard and the bare minimum. The Government have moved the goalposts of what is seen as reasonable and turned adequate housing for all into the unachievable.

We know that many people live on low incomes. A person could work 40 hours a week on the minimum wage and not be able to afford the cost of renting privately in some places in this country, especially if they have children. We should not have a race to the bottom where only those with higher incomes can afford adequate housing. Those on lower incomes deserve secure, decent living conditions with affordable rents, but that is not the situation in Westminster North, as my hon. Friend the Member for Westminster North (Ms Buck) said. Not a single home is available for low-income families and we have the lamentable situation where former council homes are now out of reach of the poorest people because of rents of as much as £500 a week.

On the need for social housing, the hon. Member for South West Bedfordshire (Andrew Selous) spoke of the need to build more homes more quickly. He talked about energy-efficient and bill-free homes, and he is entirely correct about that—no doubt about that—but the Government have built fewer than 7,000 new homes provided at social rent in England in 2017-2018, when what we need is 90,000 each year for the next 15 years just to tackle the backlog of housing need. People are being forced to turn to private rented housing. Although some positive moves have been made regarding tenant fees, affordability is still a major problem, even if people can find a property in the first place.

My hon. Friend the Member for Stroud (Dr Drew) spoke of private landlords refusing to take people on benefits. What does the Minister have to say about that? Is he surprised that private landlords are not always accommodating and understanding when their tenants are late with their rent payments? The reality is that families are being evicted because they cannot keep up with rent payments, and they enter undesirable living arrangements—sleeping on the floors of other family members, at best, and sleeping in cars and on the streets. We have heard other examples as well. Often it means that families are split up, leading to more pain and suffering.

Research from Crisis—we have heard much about its research—and the Chartered Institute of Housing has shown that cuts to local housing allowance rates mean that in 92% of areas in Great Britain, single people and couples or small families who need local housing allowance to pay their rent will struggle to find somewhere to live that they can actually afford. Until social housing can meet demand, people on low incomes must be able to find secure and stable housing in the private rented sector. Shelter has said that targeted affordability funding is not alleviating the problem. The top-up grant for areas most affected by the freeze in local housing allowance—just a 3% increase—has not worked.

[Ms Buck]

Will my hon. Friend join me in congratulating London Councils, which has been doing some excellent research? It found that, even over the period of targeted affordability funding, single rooms had declined in affordability by more than 10% since 2015.

[Alex Cunningham]

Yes, and what is happening in response? Very little. So much more needs to be done. The housing allowance is not allocated or based on how many areas are in need, just distributed to areas in a ranked order until there is no more money. In Shelter’s words, the affordability funding is

“not even close to plugging the gap.”

My hon. Friend the Member for Ealing, Southall proved that the housing crisis is very real with a series of case studies of real people and families in crisis. They are not just numbers in a table of statistics. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) told us that we need to remember the names of some of the people who never found a home, and spoke of the memorial to Miguel in his constituency. He also spoke of children in his area who are taking their GCSEs while accommodated in the local Travelodge. I understand why he is asking the new Prime Minister to take action on that systematic failure.

I hope that the Minister remains in post, and can do something. As I mentioned, we will get a new Prime Minister today, and there will be a lot of shuffling around, but whether the Minister remains or provides a handover to his successor, I urge him to work to restore local housing allowance rates back to the 30th percentile of the market, as others have called for. We need to address homelessness with immediate effect, and provide a lifeline to people on a low income. We simply cannot afford not to.

I know that it can be easy to sit in opposition and criticise those making the decisions, but Labour has made some bold pledges that we will deliver when we win a general election. We will define affordable housing as linked to local income, and scrap the Conservatives’ so-called affordable rent home price, at up to 80% of market rates. We will stop the sell-off of 50,000 social rented homes a year by suspending the right to buy—I am pleased that the Scottish Government have done that already—ending all conversions to affordable rent, and scrapping the Government’s plans to force councils to sell their best homes.

We will back councils and housing associations with new funding, powers and flexibilities to build at scale. While we work to provide 8,000 homes for rough sleepers, we will provide local authorities with £100 million to deal with winter pressures and ensure that no one sleeps rough. We will also tackle the scandal of empty homes, many of which need upgrading to be habitable, and many more of which investors simply buy and leave empty, believing that the value will go up and they will make a financial killing.

The crisis is leaving families homeless because of the Government’s failure to act. Successive Conservative, and Lib Dem coalition, Governments have failed on housing and failed to end homelessness—no wonder people have no confidence in their housing policies. There is no doubt in my mind that it is time to act on house building and, in the meantime, on the local housing allowance, before even more families are shown the door and thrown out on to the streets.

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[Will Quince]

I have been a Minister for only three months and I keep all the policies in my remit at the Department under very close review. I regularly meet and have conversations with key stakeholders in policy areas such as this, to ensure that we are aware where policies are and are not working, and that we are alive to the issues. It will not come as a surprise to the hon. Lady that stakeholders in this area have flagged LHA rates as an issue. That is why we are looking at it very closely indeed.

The additional funding enabled us to increase 213 LHA rates—there are 960 rates in total—by 3% last year. This year, a total of £210 million has been made available: the highest amount of targeted affordability funding since its introduction in 2014. That has enabled us to increase 361 LHA rates by 3%. As a result, it is estimated that 500,000 households this year will benefit from an increase of around £250 a year.

In addition to that targeted affordability funding, the Government have provided more than £1 billion in discretionary housing payments to local authorities since 2011, which the hon. Member for Westminster North referred to. Discretionary housing payments allow local authorities to protect the most vulnerable claimants and support households affected by different welfare reforms, including the freeze to the LHA.

[Ms Buck]

The whole point of discretionary housing payments is that they are temporary, so they do not provide a solution to any of these problems.

[Will Quince]

Discretionary housing payments are a tool that is available—

[Ms Buck]

A temporary one.

[Will Quince]

Not necessarily. They have been available since 2011, and more than £1 billion has been made available to local authorities. Quite intentionally, we allow local authorities discretion on how it is used, and they use that money and use it well. There is an underspend in a number of local authorities, but it is a tool used by many local authorities to prevent homelessness. Where individuals or families are at risk of homelessness, local authorities will use DHPs to protect tenancies.

The hon. Member for Stroud (Dr Drew) has raised the point about broad rental market areas a few times; I note his concerns about the broad rental market area boundaries in Stroud and the wider area. As with all policies, we keep that under review, and I am looking at this very closely. I hope the hon. Gentleman will appreciate that any reform of the policy would be a significant and complex undertaking, given that there are 192 broad market rental areas across England, Scotland and Wales. We should be aware that any changes to the BMRAs and their boundaries are likely to create both winners and losers, so I have to give very careful consideration to the potential impact.

The hon. Gentleman also raised a point about “No DSS”—landlords not renting to those in receipt of benefits. The Prime Minister and No. 10 have taken that issue very seriously. I attended a recent roundtable with a number of stakeholders and we are working very closely with the Residential Landlords Association. Part of the issue is mortgage lenders and insurers. More and more mortgage lenders are now reducing or removing their restrictions on renting to those in the receipt of benefits—Metro Bank is the most recent addition to that list. There are a few still to go, and we still have to tackle the insurance market, as some insurance policies still do not allow people who buy to let to rent to those in receipt of benefits. We are looking at that area closely and are working with key stakeholders, because we very much want to fix this—to break the myth and challenge the ignorant belief that those in receipt of benefits are riskier tenants than those who are not, because it is absolutely untrue.

The hon. Member for Ealing, Southall also raised temporary accommodation. With other Government Departments, we are working to assess what more can be done to address the number of people in temporary accommodation. Time spent in temporary accommodation means that people are getting help and ensures that no family is without a roof over their heads. The Government have targeted funding streams focused on reducing the number of households in temporary accommodation as part of our £1.2 billion spending plan.