Local Housing Allowance: Homeless Young People

Matt Western Excerpts

Tuesday 4th February 2020 Westminster Hall

[Will Quince]

The hon. Lady is partly right; the solution is not just about local housing allowance. We can continue to pump money into housing benefit, which unfortunately in many parts of the country lines the pockets of private rented sector landlords. But if we are to tackle this in the long term, it is about affordable housing and a mixture of tenure between ownership, affordable housing, which is up to 80% of market rent, and homes for social rent, which is significantly lower. It is about addressing the supply issue as well as the demand issue, to ensure that we tackle the problem for the medium to long term. That is why the Department and I are working closely with the Ministry of Housing, Communities and Local Government, not to mention the other Government Departments involved. Between us, we hold the key—we hold the housing benefit bill, but they have a lot of the levers to address the supply side.

[Matt Western (Warwick and Leamington) (Lab)]

I commend the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this debate. The Minister will be well aware that only something like 6,480 social rent properties were built in 2018. We have a huge undersupply, as the Minister highlights. The other day, Shelter told me that people are finding themselves under so much financial pressure that they cannot meet the rent because of the low payment being given to them. People are moving from a two-bedroom to a one-bedroom and are doubling up in the properties. That is putting more pressure on single occupancy and double occupancy.

[Will Quince]

There is no question that the Government are committed to increasing the supply of social housing. Through the affordable homes programme to March 2022, we will deliver 250,000 new homes on a wide range of tenure. We will renew the affordable homes programme, building hundreds of thousands of new homes.

It is important to stress that, since 2010, we have delivered more than 464,000 new affordable homes, including 331,800 affordable homes for rent. As I said, I am working very closely with my counterparts at MHCLG on the interaction between housing supply and housing benefit. Until that supply is addressed, local housing allowance rates will continue to play a part. That is why we have increased LHA by 1.7%, in line with CPI. Of course, the ambition is to go further, and I personally would like to see it go back up to the 30th percentile. That comes, as I think I have said in response to written parliamentary questions, to the tune of about £1 billion. It is not a cheap intervention, so we have to address the supply issue alongside it.

The hon. Member for Brighton, Pavilion rightly raised the broad rental market area in Brighton. That is not an easy issue to address. There are 192 broad rental market areas and 960 local housing allowance rates, so looking at them is a considerable piece of work. I am doing that work, and it is important that we do so, but it cannot be done in one financial year. Unfortunately, since there are so many of these issues in all parts of the country, there are unintended consequences. However we draw the boundaries, there are winners and losers. I understand that there is an issue in Brighton at the moment. The same is true of Blackpool and, close to my constituency in Essex, of Jaywick, Frinton and Clacton. These issues do arise. I encourage the hon. Lady to write to me with the specifics—alternatively, I would be very happy to visit—so we can look at them in more detail.

I work very closely with Centrepoint, which is a wonderful charity. I have been on several visits and I intend to do far more. We have already done a considerable piece of work in this area. I can touch on the Government’s action on homelessness and local housing allowance, although I probably do not have enough time to go into the detail I would like. There have been considerable amelioration measures, such as discretionary housing payments, which we are increasing by a further £40 million this financial year to help local authorities support people where local housing allowance is not sufficient. Over the past three years we have also had targeted affordability funding; as I understand it, in the last financial year, that increased about 45% of shared accommodation rates by 3%. Nevertheless, I would like us to go further, and I think the steps we have taken to increase rates by CPI will make a difference.

The hon. Lady referred specifically to care leavers. We know that people leaving the care system can be particularly at risk of homelessness. We have provided £3.2 million per annum to 47 local authorities with the highest number of care leavers at risk of homelessness. That has led to a number of innovative ideas to support those leaving the care system into safe, secure and long-term housing. However, I understand the case put by Centrepoint, the hon. Lady and others about the rate. She suggested two items that would cost a little under £10 million. That is still a significant sum and would require Treasury approval. She may have got the impression that she is pushing against a half-open door. I am very sympathetic to that view, including in relation to those who have experience of homelessness. She asked me to commit to meeting charities and Members with specific interests in this area. I would of course be delighted to. Actually, I think a number of those meetings are already in train, but I will of course continue to do that.

On the shared accommodation rate, our approach is based broadly on the principle that young single people in the private rented sector should have their housing benefit limited to the rate appropriate for shared accommodation, but the hon. Lady rightly made the point that there are exceptional circumstances and there need to be exceptions to policy. We already have a number of exceptions, as she pointed out, but where there are opportunities for us to go further and there is a clear evidence base for doing so, of course we will look at that.

An obvious example of other interventions is the Homelessness Reduction Act 2017, which has enabled us to make great strides in the support that we can give to young people in particular. Many of them would not have been eligible under the previous system of priority need but now will be eligible on the basis of the duty to refer. The Act is making a huge difference, and I have no doubt that the hon. Lady knows that from speaking to her local authority, as I do to mine. We must ensure, through the MHCLG, that it is suitably resourced, but we know it is making a difference, including to young people. Importantly, the Act also places a duty on public bodies, including children’s services, youth offending institutions and youth offending teams, to ensure better partnership working. That is really important for ensuring that young people get the wraparound support they need.

The MHCLG is the lead on broader Government action on homelessness, but we very much support its efforts. The Government are committed to tackling homelessness and rough sleeping. As the hon. Lady will know, we committed in our manifesto to end rough sleeping by the end of this Parliament and to fully enforce the Homelessness Reduction Act.

There are a number of issues, including local housing allowance rates, that I would love to cover in more depth. As the hon. Lady rightly pointed out, we have an opportunity ahead of the fiscal event—the Budget—on 11 March to look at housing in the round. We are having conversations with the MHCLG and the Treasury to see how we can look at supply and the way that investment in supply—in particular supply of affordable homes and homes for social rent—would interact with our housing benefit bill. It pains me that we spend around 30% of our housing benefit bill on the private rented sector. It pains me even more that, because of LHA rates and other demand and supply issues, a percentage of that—I do not have a figure, but there is research to be done there—is spent on housing that I do not believe is of a standard that the taxpayer and the Government should fund or invest in.

In conclusion, I would be very happy indeed to work with the hon. Lady—