Rent Officers (Housing Benefit and Universal Credit Functions) (Modification) Order 2023

Lord Bishop of Manchester Excerpts

Wednesday 22nd March 2023 Lords Chamber

[Lord Best (CB)]

My Lords, I thank the noble Lord, Lord Shipley, for bringing forward this Motion, and I send my best wishes for a very speedy recovery to the noble Baroness, Lady Thornhill.

It is certainly a matter of regret that the 2020 freeze on the local housing allowance is to be perpetuated, despite rent rising considerably in a number of places. When the local housing allowance which caps housing benefit falls behind market rents, tenants must make up the shortfall by finding the money from their other benefits intended to cover food, clothing, heating, et cetera. Research by the Joseph Rowntree Foundation in partnership with the Trussell Trust shows that universal credit for everyday living costs is already at a critically low level; there is absolutely no room here to pay for a rental shortfall.

Of course, what these households need is secure accommodation provided at social rents, far below the market rents of the private landlord. But as we all know, there is the most acute shortage of available social rented housing. With the social housing sector halving to 17% and the private rented sector doubling over recent years to around 19% of the nation’s homes, more and more households have had to turn to the private rented sector. But private landlords in most places have no need to take in anyone in receipt of housing benefit at a lower rent than they can get from the market.

The freeze puts terrible strains on local authorities that are working to reduce homelessness. How on earth can they fulfil the statutory duty to house families and vulnerable people when there is an absence of social housing and when rents present an insuperable barrier in the private sector? The only answer is to secure a place for them in temporary accommodation, which, as graphically described by Shelter in its recent report entitled Still Living in Limbo, is often of the most abysmal quality, often overcrowded and far from their previous home, friends, schools and family. Temporary accommodation now accommodates nearly 100,000 households, including over 125,000 children, at a cost of £1.6 billion per annum.

I have heard the argument, which was addressed by the noble Baroness, Lady Lister, that the problem of the rental shortfall—the gap between rent and housing benefit—can be overcome by the tenant obtaining an emergency discretionary housing payment, or DHP. Sadly, this safety net is not any kind of proper solution. DHPs represent less than 0.5% of total housing benefit expenditure and are usually for a few months only. There is no way in which DHPs can save tenants in a wide spectrum of extreme circumstances, including all those afflicted by the LHA freeze. I gather from housing expert Sam Lister at the Chartered Institute of Housing that last week, the Treasury announced that the total for DHPs for the next two years will be much lower than in any of the preceding 10 years, despite the extra pressures the continuing LHA freeze will bring.

It is understandable that the Government do not wish to pay more to private landlords. The total cost to the nation of housing benefit is around £22 billion per annum. Blame for this predicament must fall on the Chancellor’s predecessors, who made short- term savings by cutting up-front grants for social housing. Grants paid for new social housing would have secured homes at lower rents for decades. For the longer term, the answer is to rebalance the rented stock so there is more social housing to go around. To accelerate this, government funding for acquisition and modernisation of run-down privately rented stock by social landlords is a solution that saves money over the years ahead.

However, the immediate regret is that perpetuating the LHA freeze will bite harder and harder as private rents inexorably increase. Citizens Advice has calculated the proportion of all households in a critical financial state that would be rescued by the lifting of the LHA cap. The answer is that this action by the Chancellor would take about 10% of these households out of their current financial crisis—by no means a panacea for all the problems of negative budgets and debilitating poverty, but a significant and simple way in which to make a huge difference to the lives of the hardest pressed of our fellow citizens.

I support the noble Lord, Lord Shipley, in his Motion to Regret.

[The Lord Bishop of Manchester]

My Lords, I am very pleased to take part in this short debate. I would like to add my support to the Motion proposed by the noble Baroness, Lady Thornhill, and along with others wish her a speedy recovery. I am grateful for the impressive way in which the noble Lord, Lord Shipley, took this on at very short notice.

I declare my interest as set out in the register, I am the owner of one apartment, in Birmingham, currently privately let. I echo the concerns of other noble Lords. I had intended to add further statistics—I am a mathematician by background—but I think noble Lords have had enough numbers in this short debate already.

It is my privilege to chair the Manchester Homelessness Partnership, which brings together our city council along with public sector bodies, the private sector, universities, the blue light services, health services and charities. We have fought hard and long and we have actually got rough sleeping down in our city since its peak in 2018. But increasingly, my colleagues and I are finding that those who end up on the streets are not there for the usual reasons, such as the breakdown of a marital relationship or leaving the parental home after a dispute. It is also not just about mental health, although that is still a major concern. Increasingly, it is simply because they have lost a private tenancy due to being unable to pay the rent. We have heard how rents have gone up, but homelessness carries a huge cost. It is a heavy drain on public funds, as we have heard, but even more critically, as the noble Lord, Lord Shipley, has said, it wrecks the lives of ordinary, decent members of our communities. It does not take long to end up homeless, but it takes years to get out of the pit you have fallen into. It is a long, slow and painful process, as I know from having befriended people who have been rough sleepers on the streets of my city.

I am also concerned by the opaque nature of explanatory material on this SI, provided by the Department for Work and Pensions. The Secondary Legislation Scrutiny Committee’s report states that the explanatory material laid in support of the statutory instrument

“provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation”.

Indeed, it does not do much more than to state that,

“for 2021/22 and 2022/23, all rates were frozen at the same cash levels that were set in 2020/21”.

That is not an explanation—and there is no understanding of the policy in that. As the committee’s report states, this makes the House’s scrutiny role much more challenging. We need to know why something is being done if we are to scrutinise it properly.

To conclude, I add my support to the noble Baroness’s Motion and echo the calls of many in the housing sector, as well as noble Lords in this debate, who are urging the Government to unfreeze local housing allowance now.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise to offer the Green group’s support for this regret Motion and to echo others in thanking the noble Baroness, Lady Thornhill, wishing her all the best and thanking the noble Lord, Lord Shipley, for his excellent introduction.

In formal terms, this is a Motion to Regret, but what is very clear from this debate is that it is really an expression of horror at the infliction of poverty, inequality and deep suffering on people who are in that situation through absolutely no fault of their own but as a result of—as the noble Lord, Lord Best, said—decades of government policy that have seen housing treated primarily as a financial asset rather than homes that should be secure, affordable places for people to live in. That includes the great privatisation of the right-to-buy policy, the failure to keep building council homes and the reliance on a handful of private sector builders whose profits keep going up while the rest of us suffer—a structure that reflects so much of our economy.