Housing Benefit (Amendment) Regulations 2011

Lord Stoneham of Droxford Excerpts

Wednesday 12th October 2011 Grand Committee

[Baroness Thomas of Winchester]

My Lords, I, too, am grateful to my noble friend Lord Kirkwood for tabling the take note Motion. On the face of it, the proposal to extend the age range for single people who receive local housing allowance from 25 to 34 seems entirely reasonable. I, myself, lived in shared flats or houses at that age, as I could not possibly afford a flat or house in London on my salary from the Liberal Party. However, although my fellow housemates and I tried to be careful when interviewing potential new sharers, we did not expect them to belong to particularly vulnerable groups or be on housing benefit. The only tension came when boys wanted to get girlfriends in, or vice versa.

The Government, to their credit, have, as we have heard, made two exemptions. I shall mention the exemption for homeless people who have spent more than three months in a hostel, which is particularly welcome because of the difficulty of moving those in hostel accommodation on. Here I declare an interest as patron of the Winchester Churches Nightshelter, which has an especially impressive record of moving clients on to suitable accommodation.

However, even with those two exemptions, there is a great deal of concern among all the stakeholders who were consulted about the policy. In fact, we see from the consultation outcome that none of the respondents supported the proposed changes and the majority questioned the rationale for them. The $64,000 question is whether the proposals will save the taxpayer money or cause even more to be spent by local authorities having to find extra emergency accommodation. The SSAC report answers that in clear terms. Thank goodness, I have a different sentence to cite from that quoted by the noble Baroness, Lady Lister. The report states:

“The evidence we have seen points to this being a high risk approach to cutting costs that does not take account of potentially negative impacts on other areas of public policy and potential increases in other areas of public expenditure”.

The Government’s solution is to increase discretionary housing payments to local authorities to support those in the most vulnerable situations who do not fit the exempted categories, but the discretionary housing payments will be spread extremely thinly across a lot of housing hotspots because of the changes to the 30th percentile. Such payments can be regarded only as a temporary sticking plaster. An awful lot is being asked of this particular pot of money, which will not go very far when spread across the poorer boroughs of London, not to mention those of all the other large conurbations. In Winchester, homelessness is increasing dramatically, with evidence from letting agents suggesting that fewer than 10 per cent of properties are affordable. As I have said before, Winchester is a very expensive place in which to be poor.

As my noble friend said, are there really enough houses and flats available for multi-occupation in areas where there are likely to be jobs, particularly low-paid jobs? In a buoyant market, will landlords really be willing to reduce their rents to let properties to what could be a potentially unstable cohort of people, when landlords will have no difficulty finding tenants who will pay the market rent?

In my view, this is a worrying experiment. The Social Security Advisory Committee report states that,

“the Department knows very little about either the shared accommodation market”,

or those who live in that sector. As we have heard, that committee recommends that the Government should gather evidence as a matter of urgency with the proposals introduced gradually and evaluated. That sounds like a very good idea to me.

[Lord Stoneham of Droxford]

My Lords, I am very pleased to join in this debate initiated by my noble friend Lord Kirkwood. I declare an interest as chair of First Wessex Housing Group, which has a number of shared-accommodation facilities, and I am also chair designate of Housing 21.

Sadly, this is an example of government spending cutbacks whereby the broadest backs are not assuming the biggest burden—probably the reverse. Among the 62,000 people who it is thought will be affected by these changes, there are a lot of very vulnerable people. The fundamental problem is that we simply do not know how many.

I accept that this is a tough decision in very tough times, and there are a number of positives in what the Government have done. The transition period is obviously very helpful, extra money has been provided for discretionary housing payments and certain of the exemptions have been widened—although we have heard my noble friend Lord Kirkwood’s reservations on those. It is probably also true that, in these tough times and in the current climate, it is inevitable that we probably have to encourage older children to stay at home with their families. Obviously, people in the private purchase market are having to do that as well. However, one of the problems is that we are often dealing here with families of children where the family relationships have broken down.

There are a number of negatives to this change. First, as I mentioned, we simply do not know who these people are nor, as a result, do we know how they will adapt. What we do know is that there are certainly some very vulnerable groups here, as my noble friend Lord Kirkwood mentioned, including people with mental health issues and drug addiction issues, young offenders and people trying to regroup from broken marriages and broken relationships. We also simply do not know what pressures on other areas of the public purse will result from these changes.

Finally, there is a great shortage of shared accommodation in certain areas, especially in rural areas. One thing that has not been anticipated is the further market pressures that will result. For example, one of the hostels that I am familiar with is designed to encourage young people to become independent in the community and to get their own accommodation. By increasing the pressure in the marketplace from those aged between 25 and 35, we will make it much more difficult for landlords to accept people who are under 25, who are much more difficult to deal with, so landlords will go for the older people. That will mean worse problems in that market as well.