Housing: Discretionary Housing Payment

Lord Freud Excerpts

Wednesday 9th April 2014 Lords Chamber

[Lord McAvoy]

To ask Her Majesty’s Government what assessment they have made of the level of discretionary housing payment available to local authorities.

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

My Lords, the department has asked local authorities to provide details regarding their use of discretionary housing payments twice yearly. Details of how local authorities are using discretionary housing payments in the first half of the year were published on 20 December. Despite some people’s predictions, the vast majority of local authorities were managing within their budgets. In 2014-15, local authorities will receive a share of £165 million, which will ensure that they can offer ongoing support where appropriate.

[Lord McAvoy (Lab)]

My Lords, despite assurances from the Minister, 47 councils spent 90% of their DHP budget by February. A third of the councils reported that a third of the applications were refused. Can the Minister tell the House whether he is aware of how many evictions there have been due to bedroom tax arrears? Does he know? Does he care?

[Lord Freud]

My Lords, the noble Lord used those figures as if they were his; I am sure that he would want to attribute them to another group called False Economy. They show that 85% of councils surveyed had spent less than 90% of their money with one month to go. However, in that particular report, which found that 11 councils had overspent, there were a lot of mistakes. The figures for four of them—Swindon, Haringey, Leeds and Middlesbrough—were simply wrong.

[Lord Best (CB)]

My Lords, has the Minister had a chance to see the Joseph Rowntree Foundation report released today, which provides a fairly definitive analysis of what has been going on with the so-called bedroom tax over the past six months? If he has, did he note that—sadly, from one perspective—savings were about £115 million less than had been hoped for during the course of this year? About 6% of people have moved home, but another 22% have been trying to move home but have not been able to downsize, because there is not accommodation for them. Although the Rowntree report from Professor Wilcox predicts that over £330 million will be saved this year, sadly, that is at a pretty great cost to both tenants and landlords.

[Lord Freud]

The savings that we are looking at—which are running on the Budget scoring at £490 million—are both observable and unobservable; in other words, from people moving or from people taking up jobs and coming off benefits. There are various figures around. The BBC last week talked of 6% of people moving in 11 months; the JRF report, which the noble Lord has just cited, talked about 6% in six months; a report a couple of months ago from Harry Phibbs, doing a similar job, found that 11% had come off benefits because they had gone into work. We will have proper returns on discretionary housing payments in May, and are working on getting a proper report on all of this.

[Baroness Taylor of Bolton (Lab)]

Will the Minister answer the question posed by my noble friend about the number of evictions? Does he know the number, and does he care?

[Lord Freud]

My Lords, I am not sure of the exact number of evictions, but I do not think that there are very many at all, if any. Clearly it is a matter of great concern. I can let the noble Baroness know that the data from the Homes and Communities Agency, which are based on the 266 largest housing associations with more than 1,000 homes, show that the average arrears in the final quarter of last year—the third quarter of the financial year—fell to 3.9% from 4.1% in the previous quarter and that rent collection rates for the year stood at 99%.

[Lord Flight (Con)]

The Minister will be aware that in central London and, in particular, the borough of Westminster—and I declare an interest as my wife is a councillor—there have been cases where very substantial housing benefit amounts have had to be paid particularly to house those categories that the local authority is obliged to house. Is there any system or intent to limit the amount of housing benefit that can be paid on an individual property?

[Lord Freud]

My Lords, my noble friend draws attention to the point that we have introduced a cap on the amount of housing benefit to stop the very large amounts that were paid on local housing allowance.

[Baroness Sherlock (Lab)]

My Lords, 500,000 people are affected by the bedroom tax, most of them disabled. If the Minister wants some figures, two-thirds of tenants hit by the bedroom tax are currently in arrears and, of those, 40% have been issued with a notice seeking possession. This is a serious crisis, and I think that the Minister should acquaint himself with all the figures, including those on evictions.

The House knows that a Labour Government would abolish the bedroom tax. The Minister told the House on 12 December that,

“the interim review is due to be published in the spring of 2014. I will be most pleased to discuss the findings of that review with Members of the House, who I suspect will be keen to have that dialogue”.—[Official Report, 12/12/13; col. 907.]

I am very keen to have the dialogue. When does it start?

[Lord Freud]

The noble Baroness need not persuade me about the savings—she needs to persuade the OBR, which has scored down in the Budget £490 million. The noble Baroness talked about the fact that a Labour Government would abolish the spare room subsidy. We will produce an interim report later this year, as I said, and we will bring forward next year the full report on what has been happening with the bedroom tax, as you would call it.