Welfare Reform Bill

Lord McAvoy Excerpts

Tuesday 18th October 2011 Grand Committee

[Baroness Hollis of Heigham]

My Lords, Amendment 34A, as noble Lords will understand, is a paving amendment for the subsequent, substantive amendment, Amendment 48, so that we can have a broader discussion on housing stock before we get into talking about individual client groups. That seemed to be a sensible way of proceeding. I declare an interest as a former chair of a local authority housing committee and a current chair of the Broadland Housing Association.

For me, underoccupancy is the most important issue in the housing section of the Bill. Essentially, the Government are saying that any tenant who is not a pensioner and is underoccupying will have their benefit cut to the size of the property that they should be occupying. The English house condition survey, and the DCLG in the past, regards someone as underoccupying if they have more than one spare bedroom. Indeed, the latest Written Answer from Grant Shapps states:

“It is estimated that 423,000 households were under-occupying”,

which obviously includes pensioners.

“This estimate is a three-year average … Under-occupying households are those with at least two bedrooms more than they need according to the Bedroom Standard”.—[Official Report, Commons, 11/10/2011; col. 337W.]

The DWP, for benefit purposes, will not allow two bedrooms more or one bedroom more but requires a precise fit. This is a much tighter and even claustrophobic ruling. A later amendment, Amendment 44, which I favour, would align the DWP to the DCLG standard. As almost 80 per cent of tenants who are affected by the DWP’s proposals have only one spare bedroom, that would address the issue for most people, although of course with implications for projected savings.

This amendment, like Amendment 43, tackles the issue in a different way. It requires the social landlord, not the tenant, to take responsibility. If the landlord does not have the stock to offer, the tenant should enjoy his current home with full HB. If the landlord can offer appropriately sized stock by DWP standards, the tenant takes the HB hit if they choose not to move.

Why do I think the DWP standards of underoccupancy are too tight? Under DWP plans, a couple with two teenage daughters in a three-bedroom house will be underoccupying, and will receive benefit only for a two-bedroom flat or home. Let us remember that we are dealing with social housing that is now built well below Parker Morris space standards. Two teenage girls might be expected to share a second bedroom that is 10 feet by 8 feet. Let us visualise two single beds put against the 8-foot wall, with 2 feet between them. Fifteen year-olds are not going to sleep in bunk beds as though they are five years-old. A 3-foot wardrobe and a 3-foot wide chest of drawers are in the 3-foot by 6-foot space at the bottom of the beds. There may be a gap of 1 foot, and that is it, if you are to open the bedroom door. There is no space for a desk, a table, or a chair. Where exactly do they do their homework? Not in the galley kitchen, because they will not have one, and not in the only living room, where the parents want to eat, talk, watch TV. They cannot do their homework anywhere, so maybe they will not. City children can stay on at school of an evening or use the public library for their homework in that situation. Rural children, dependent on the school bus, can do neither. And then we are surprised at the GCSE results. As a result they cannot find a job, and I fear that there could be two generations of worklessness.

This example assumes that those four family members have moved to the two-bedroom flat as required under the new proposed changes in housing benefit. Actually, probably they will not. Most two-bedroom homes are actually three-person, not four, with a small second bedroom, and although some 12 per cent of my housing association’s three-bedroom houses are four-person houses with a double bedroom and two singles, most are five, so we have three-person accommodation, and five-person accommodation. Imposing HB caps by bedroom numbers rather than by total space size of bedrooms—that is, trying to shoehorn a four-person family into a two-bedroom, but three-person, property—will certainly take us into the realm of forced overcrowding and judicial review. Such a family will be deemed by the DWP to be underoccupying a three-bedroom five-person property, and deemed by housing law to be overcrowded in the only property they can move to, which is a two-bedroom three-person home. What would the Minister have us do?

Will the Minister say whether, if that family were in a three-bedroom but four-person house, they will receive full HB as three bedrooms or persons, or whether they would be expected to move to a two-bedroom flat even if they were three persons? If we put a family of three into a two-bedroom four-person house, would that be classified as underoccupied? I am not playing word games because, depending upon the outcome of this question, families will or will not lose more than £10 a week of their housing benefit. These are the allocation decisions that my housing association and local authority are making day in and day out.

A fortnight ago I was visiting an attractive small development of some 20 homes that we have just built. Thirteen of them were two-bedroom houses, four of them were three-bedroom and there were three bungalows. However, of those 13 two-bedroom houses, 12 were three-person. Only one was four-person. We do not have and we are not building the four-person stock that the Minister has now told us that tenants in a family of four should occupy to get their full HB. They are mostly either three-person or five-person, with the assumption that the couple get the first type and the couple with children get the other. Nationally, our situation is replicated. There is a huge shortfall of one-bedroom and two-bedroom accommodation. Relatively, there is a surplus of three-bedroom accommodation. The national federation calculated that last year 180,000 families were waiting for two-bedroom homes, and just 60,000 became available. Who do those families go to?

I can tell noble Lords about our allocation structure. First, the homes go to families in urgent housing need. Next we have pensioners—to whom the changes do not apply—in three-bedroom homes queuing up to move to more convenient and easier-to-heat two-bedroom homes. Yet we cannot always help them because we do not have the stock, and they are the people who are most likely to underoccupy. Then we have families who need to transfer from one two-bedroom property to another in order to help look after frail elderly people in a nearby village. So we have queues of people wanting two-bedroom accommodation who are willing and able to move, and we cannot meet that demand.

However, under the Bill, if there is no two-bedroom accommodation for my four-person family to move to—as there is not—they are fined with cuts of £15 a week or more. It is madness as well as a misery. We allow—indeed, we make—the pensioners who would like to downsize stay put, while requiring the family who wants to stay put to move. This possibly causes a dislocation of schools for their children and of family support. Yet the HB bill would be identical if we swapped those categories around.

To its credit, the impact analysis recognises this and agrees that there are insufficient two-bedroom properties to meet these forced moves. On page 2, it is stated:

“If all existing social sector tenants wished to move to accommodation of an appropriate size, there would be a mismatch between available accommodation and the needs of tenants”.

Quite so. Some 670,000 tenants would be affected—2,000 of them disabled—or 32 per cent of all HB claimants. Some 108,000 tenants live in an adapted property, with the average cost of adaption being £6,500; yet 78 per cent of them are underoccupying by only one bedroom, which the DCLG does not consider as underoccupying but which the DWP is proposing to consider for benefit purposes. That could be an extra small bedroom for each teenage daughter to do their homework in, for a husband or wife who is in poor health and has disturbed sleep, for the occasional overnight carer of a disabled person, or for a grandchild.

Let us return to my family of four who are obliged to move or face HB cuts. As there is a shortage of smaller accommodation, what then? How can the tenant move if there is nowhere to move to? “Oh”, states the impact analysis blithely on page 8, at paragraph 24:

“In these circumstances individuals may have to look further afield for appropriately sized accommodation or move to the private sector, otherwise they shall need to meet the shortfall through other means such as employment, using savings or by taking in a lodger”.

Employment? Do noble Lords really think that they have not so far looked for work and that a £15 fine on their HB bill will find them a job? Using savings? The average individual savings of £300 would cover the shortfall for barely five months. Taking in a lodger? If you have small children? We need to get real. Instead, if they cannot afford the HB cut, they may move, apparently, to the private rented sector, where their HB bill will of course increase because it is higher. That, of course, is if they can find a landlord to take them, given their past history of possible rent arrears, and if they can find the deposit—a month’s rent in advance—together with moving costs, curtains and carpets, which may come to £1,500 out of savings of £300. In rural Norfolk, all this takes place close to the school that the children go to. It is simply not possible. If the family moves after falling into arrears, which private landlord will accept them anyway?

The impact analysis is revealing—it sort of knows all this. It expects savings of £700 million, but this is based on the presumption that families do not move but stay put, are fined and have their HB cut. I quote page 2:

“If a significant number of tenants wished to move, this would reduce direct savings and place extra demands on social landlords”.

A couple with a child in Crawley, quoted by Shelter and Crisis, moving from three-bed social housing to a two-bed private rented flat would see their HB bill rise by £66 a week. The savings—and this is key—are based not on people moving to smaller accommodation but on their being fined for not moving because the stock is not there and for staying put. In other words, the Government are basing their savings not on people doing what the Government say they should do but on their not doing it. The Government need their public policy, for people to move home, to fail if they are to ensure that their private policy—to cut HB and make the savings off the fines for people not moving as normally required—succeeds.

I was pretty horrified when I read that. You might think that issues around underoccupation were at the very least being propelled by a huge increase in overcrowding, so that, however reluctantly, underoccupying families should move to make way for those in greater need. It is not so. On average, 5 to 6 per cent of all households in all rented sectors are overcrowded; 40 to 50 per cent are fit; 40 to 50 per cent are underoccupied, many of them containing pensioners. So the needs of the overcrowded could be met if we were able to meet the requests of pensioners and others to downsize. No force majeure is required, except that we do not have the stock to do it.

This is not about the need of other families for the house that you are underoccupying; it is about artificially capping the HB bill knowing that there is insufficient stock for tenants to move into and then pocketing the fines because they have no alternative course of action. That is not a proper way to behave. They stay put because they cannot move and arrears mount because they have run out of savings. What do the Government suggest local authorities and housing associations then do? Should they evict them? As I said, how many private landlords will take on a tenant with rent arrears? No judicial review, and there will be plenty of those, would regard them as intentionally homeless—in which circumstances the local authority would give them priority housing and back they would come again into social housing, where everybody can find a home, or go into B&B at five times the cost. But if they are not evicted, arrears mount rapidly and a housing association’s balance sheet goes into the red. It may already have tripled the amount set aside for rent arrears due to direct payments to tenants. It could now expect it to double again if it does not evict.

We have four solutions. First, we can follow Amendment 44, aligning the DWP’s definition of overcrowding with that of the DCLG and largely define the problem away. This is the solution that I prefer, but I accept that it has cost implications. Secondly, we can build and better balance the stock, but that will take years, as our building programme is being halved by DCLG. We can, thirdly, ask local authorities to use their discretionary housing payments to top up, except that my local authority ran out of money halfway through the financial year—last November, in fact—and even then had helped only a few families. The £60 million, although welcome, will go nowhere near to meeting or softening cuts of £2 billion-plus. The final option is the path of these amendments. We place the responsibility on the landlord and not the tenant. They do not say no change; they are genuinely a compromise. If the social landlord can make an offer of appropriate accommodation, the tenant will be expected to take it or take on the HB shortfall and government make their savings. But if the landlord cannot do so because the homes are simply not there, as in my housing association, then HB continues exactly as was.

We sanction people in JSA if they do not seek work, because they can and should. We use the threat of sanction to change their behaviour. What we do not do is sanction them if, after a proper job search, they cannot find a job, because no change in their behaviour can change the economy and job vacancy rates. We sanction them according to what we can reasonably expect them to do and how they change their behaviour. This is about job searching, not a lack of job success.

Similarly, it may be reasonable to sanction by HB cuts someone who is grossly underoccupying a house that a much larger family desperately needs and who could change their behaviour by downsizing. We could debate that, but to sanction families for not moving when they cannot change their behaviour and cannot move because of the housing stock is not a sanction but a punishment of people who not only have committed no offence but who can do nothing to avoid the sanction by changing their behaviour. That is wrong. We should not fine some of the poorest people in the country who have been set up to fail. It is not their fault, and it is not decent, and I really hope that the Minister, who I am sure will share these worries, can indicate that he accepts the principle of the compromise of this or some subsequent amendment. We would all be happy to discuss further with him how this might be done. I beg to move.

[Lord McAvoy]

My Lords, I want to put a couple of points to the Minister on a particular aspect of the availability of suitable accommodation. I will describe the city of Glasgow because it is the biggest city I know. I stay adjacent to it and I know quite a bit about the different types of housing there. Some is council accommodation. My noble friend Lady Hollis of Heigham has indicated that size is important and that people can be in a small room that is classed as a room. Glasgow has what are called three-stairs-up tenements, which are usually in red or grey sandstone tenement blocks. The rooms are smaller in the likes of Dennistoun, Townhead and some older parts of the city centre, but massive in the likes of Shawlands, King’s Park and Langside. If someone was “forced” to move from a small two-bedroom flat in Dennistoun to King’s Park or Shawlands, they would be dancing up the stairs, because it would be a vast improvement on the living space that they had had. They would soon get a sofa bed in the living room.

I am leading up to the fact that this is a very difficult situation and I really do not know how this can be done. Has any assessment been made to address the main thrust of my noble friend’s amendment, which deals with the fact that the size of rooms is just as important as the number of rooms? As I say, it would baffle me, but there are highly paid people working for the Government who should at least be able to test this. My question is therefore: has some consideration been given to assessing the size of rooms compared with the number of rooms in individual cases?

[Baroness Turner of Camden]

My Lords, I support the amendment, which was so comprehensively moved by my noble friend Lady Hollis. One of the concerns of the organisations that have written about the Government’s proposals relates to the plan to reduce housing benefit for working-age tenants who are allegedly underoccupying social homes. From 2013, some 670,000 social housing tenants receiving housing benefit could lose an average of £676 a year, because under the new rules their homes could be deemed too large for their needs. The cuts could force them to choose between moving away, and thus leaving any local support networks or supportive neighbours, or going into debt. This could be particularly difficult for disabled claimants, many of whom could have had their homes adapted to deal with their disability. A spare bedroom may be necessary should family members visit or if the aid of a carer is required. There may well be no similar accommodation available in the locality. Some of the amendments before the Committee attempt to deal with these problems.